EM ASIA FX-Singapore dlr drives Asia FX lower as MAS move may fan regional easing

* Singapore dollar lowest since August 2010

* Singapore c.bank reduces slope of policy in sudden move

* Ringgit, baht fall ahead of c.bank meetings

(Adds details, updates prices)

By Jongwoo Cheon

SEOUL, Jan 28 (Reuters) - The Singapore dollar on Wednesday

hit its weakest in nearly four and a half years, driving losses

among emerging Asian currencies, as regional central banks may

follow the city-state's unexpected monetary policy easing to

tackle deflation.

The Monetary Authority of Singapore (MAS) reduced the slope

of its monetary policy band ahead of its scheduled review in

April. The central bank also cut its inflation forecast for the

year.

Singapore manages monetary policy by controlling the

exchange rate, rather than borrowing costs, because trade

dominates the economy.

The surprise move sent the Singapore dollar to

1.3570 per U.S. dollar, its weakest since August 2010, on hedge

funds selling.

Malaysia's ringgit and Thailand's baht

also fell, reflecting perceived risks that the central banks of

those countries could surprise with interest rate cuts later in

the day.

"Bank of Thailand is a potential candidate. We see risks of

a move today," said Jonathan Cavenagh, senior FX strategist with

Westpac in Singapore, when asked if other central banks will

ease.

South Korea's central bank is also expected to cut its

interest rate, he added.

A number of central banks have eased their monetary policy

in recent days to cope with deflation and prop up economies,

leading to speculation that the U.S. Federal Reserve could take

a dovish turn in its post-meeting statement after this week's

meeting.

SINGAPORE DOLLAR

Analysts now assume the MAS's slope in the Singapore dollar

nominal effective exchange rate (NEER) appreciation is at 1

percent per annum, compared to their previously thought 2

percent appreciation.

They are revising down the Singapore dollar's targets.

Andy Ji, Asian currency strategist for Commonwealth Bank of

Australia in Singapore, expected more stimulus in April.

"Another re-centering is still on the cards. It may be

possible to ease further in April," Ji said.

MAS earlier said that it would continue to stick with a

policy of allowing the Singapore dollar to appreciate modestly

and gradually against a basket of currencies, although it would

reduce the slope of appreciation.

The city-state's currency has been suffering from a sluggish

economy and slowing inflation. Some investors had already

expected the central bank to ease monetary policy in the

upcoming review in April.

The Singapore dollar was the second-worst performing

emerging Asian currency after the Malaysian ringgit so far this

year with a 1.9 percent depreciation, according to Thomson

Reuters data.

RINGGIT

The ringgit fell, tracking the weakness in the neighbouring

Singapore dollar.

The Malaysian currency found some relief as investors sold

the Singapore dollar against the ringgit.

Still, the ringgit stayed under pressure on risks of a

central bank rate cut later in the day.

Bank Negara is expected to keep its key interest rate

unchanged at 3.25 percent, as the country's economy

remains at risk from a slump in oil prices and a weakened

currency, a Reuters poll showed.

BAHT

The baht fell as offshore funds and local traders, betting a

rate cut later in the day.

"What the MAS did today may put pressure on the BOT," said a

Thai bank currency trader in Bangkok.

In a Reuters survey on Monday, the Bank of Thailand was

expected to leave its policy interest rate steady at 2.00

percent.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0405 GMT

Currency Latest bid Previous day Pct Move

Japan yen 118.13 117.85 -0.24

Sing dlr 1.3515 1.3389 -0.93

Taiwan dlr 31.209 31.325 +0.37

Korean won 1085.40 1079.80 -0.52

Baht 32.63 32.53 -0.30

Peso 44.17 44.06 -0.25

Rupiah 12500.00 12473.00 -0.22

Rupee 61.51 61.40 -0.19

Ringgit 3.6235 3.5975 -0.72

Yuan 6.2470 6.2435 -0.06

Change so far in 2015

Currency Latest bid End prev year Pct Move

Japan yen 118.13 119.66 +1.29

Sing dlr 1.3515 1.3260 -1.89

Taiwan dlr 31.209 31.718 +1.63

Korean won 1085.40 1099.30 +1.28

Baht 32.63 32.90 +0.83

Peso 44.17 44.72 +1.25

Rupiah 12500.00 12380.00 -0.96

Rupee 61.51 63.03 +2.47

Ringgit 3.6235 3.4965 -3.50

Yuan 6.2470 6.2040 -0.69

(Editing by Eric Meijer)