SINGAPORE (Reuters) - Singapore's monetary policy easing last month was a "measured" response to a sharp drop in demand and the ensuing deep recession that hit the trade dependent economy, the central bank said on Wednesday.

Ong Chong Tee, deputy managing director of the Monetary Authority of Singapore, told a business seminar that the
central bank was "maintaining price stability over the medium term that will continue to underpin confidence in the Singapore dollar".

The MAS eased monetary policy by effectively devaluing its currency in April to counter a record economic slump while also keeping a lid on interest rates.

It shifted the centre of its secret trade-weighted band for the Singapore dollar to the existing weak level of the exchange rate basket, a move analysts said was a one-off devaluation.

The Singapore dollar traded at 1.4766/77 to the U.S. dollar by 0550 GMT (1.50pm local time), off lows earlier in the day.

The currency is Singapore's main policy instrument, and the central bank said in its review that it had repeated what it had done in previous downturns in 2002 and 2003.

Ong told the seminar the government's fiscal response has been decisive to help alleviate the economic downturn.

But he said a sustained and broad-based recovery for export-oriented Asia depends on growth improving in the more developed economies.

"While there are tentative signs that the rate of contraction has moderated, the prospects for the region in the
near term remain uncertain: the reduction in demand due to the sharp fall in exports will not be fully offset by government measures to support the domestic economy."

Singapore's economy contracted a record 11.5 percent in the first quarter of 2009 from a year earlier, more than a market median forecast of an 8.8 percent slump.

The government expects the economy to shrink 6-9 percent this year.