* Policy appropriate for price stability, economic recovery
* Revises up 2009 CPI forecast, inflationary pressure muted
* Central bank loses $6.3 bln in financial market turmoil (Adds detail, quotes)
By Nopporn Wong-Anan
SINGAPORE, July 16 (Reuters) - Singapore's central bank on Thursday raised its 2009 inflation forecast but said monetary policy was suitable to ensure both price stability and an economic recovery.
Singapore leapt out of recession in the second quarter and the government on Tuesday raised its 2009 economic forecast. It also warned that growth would likely be slow and uneven.
"We assess that the current policy stance remains appropriate to support the economic recovery and ensure medium-term price stability, which in turn underpins confidence in the Singapore dollar," the Monetary Authority of Singapore's Managing Director Heng Swee Keat told journalists on Thursday.
He forecast inflation of -0.5 percent to +0.5 percent this year, compared to a previous forecast of -1 pct to 0 pct, as inflationary pressures continue to be muted.
"The revision takes into account the recent developments in global commodity prices," Heng said.
Singapore's central bank manages monetary policy by adjusting steering the Singapore dollar against a secret basket of trade-weighted currencies. In April, it shifted the midpoint of this trading band lower. It next reviews policy in October.
The Singapore dollar was at 1.4531/45 to the U.S. dollar by 0535 GMT, versus 1.4528 before the comments.
FINANCIAL WOES WEIGH
Despite the stronger-than-expected economic performance in the second quarter, many analysts believe the central bank will keep its accommodative monetary policy in October.
"All things being equal, you should expect the Singapore dollar to move to the upper end of the NEER (nominal effective exchange rate)," Citi economist Kit Wei Zheng said. "I don't think there will be a change in October's monetary policy but next year is a possibility."
Second-quarter gross domestic product rose 20.4 percent on a seasonally adjusted and annualised basis from the previous quarter, after four quarters of contraction. The government forecast a full year contraction of -4 to -6 percent, after previously predicting -6 to -9 percent.
Heng said the economy was "likely to witness slow and uneven growth, rather than sharp and decisive recovery," citing strains in the world financial system and weakening job markets in the big economies.
The financial crisis badly hurt trade-dependent Singapore, making it the first Asian economy to enter recession in 2008, and it also sent the central bank's investments into the red.
Heng said the bank suffered a net loss of S$9.2 billion ($6.3 billion) in its financial year ending March 2009, compared to a profit of S$7.44 billion a year earlier.
Singapore's two sovereign funds, GIC and Temasek, also slid deep into the red after they were burned by investments in Western banks. The government tapped its reserves in January to help fund a stimulus package. (Editing by Neil Chatterjee & Jan Dahinten)