SNB keeps limit on franc, rates on hold near zero

ZURICH Thu Dec 13, 2012 3:36am EST

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ZURICH Dec 13 (Reuters) - The Swiss National Bank stressed its determination on Thursday to keep a lid on the safe-haven franc at 1.20 per euro and threatened to take further steps if necessary as it predicted downside risks to the economy would stay high.

"The Swiss franc is still high. An appreciation of the Swiss franc would compromise price stability and would have serious consequences for the Swiss economy," the SNB said in a statement after its quarterly policy review on Thursday.

"Consequently, the SNB will continue to enforce the minimum exchange rate with the utmost determination."

The SNB forecast the Swiss economy would grow by 1-1.5 percent in 2013 after an expected 1 percent in 2012. It t rimmed its inflation forecast, predicting pr ices would fall 0.7 p ercent th is year and 0.1 pe rcent in 2013, rising ju s t 0. 4 percent in 201 4.

The SNB kept its target range for the three-month Libor at 0.00-0.25 percent, as analysts polled by Reuters all expected.

(Reporting by Emma Thomasson)

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