FRANKFURT (MNI) - The Swiss National Bank left its target range for the three-month Swiss franc Libor unchanged at 0.0%-0.75% and will continue targeting the lower end of the range at approximately 0.25%, the central bank said Thursday.

Most economists had expected the central bank to leave rates on hold, especially after SNB Vice-Chairman Thomas Jordan said last month that it was "still too early to exit zero monetary policy."

The SNB said it will continue to "act decisively to counter an excessive appreciation of the Swiss franc against the euro."

The option of further currency intervention does not come as a surprise, since the SNB has confirmed this policy since its last rate-setting meeting in December and intervention rumors have circulated in markets as recently as late last month.

However, according a report in the Financial Times on Thursday, currency traders have been building up bets on a rise in the Swiss franc, speculating that Switzerland's recent strong economic performance may lead the SNB to scale back intervention.

While maintaining its ultra-lose monetary policy stance, the central bank acknowledged that prospects for the Swiss economy have brightened further after GDP expanded faster than expected again by 0.7% in the final quarter of 2009.

The SNB raised its 2010 GDP growth forecast to around 1.5% from 0.5% to 1.0% projected in December. The inflation forecast was lifted to +0.7% in 2010 from the previous +0.5% forecast and left unchanged at +0.9% for 2011.

In December, outgoing President Jean-Pierre Roth had warned "the impression is growing that the crisis measures must soon be corrected in order to preserve price stability over the medium term."

Looking ahead, the SNB is likely to unwind unconventional support measures and tighten monetary policy faster than the Eurozone. However, the pace of change will largely depend on the strength of the Swiss franc.

While acknowledging that "in the medium term monetary policy must become more restrictive," Jordan said last month that the "exchange rate has an influence on monetary conditions. With a strong franc the interest rate adjustments would not need to occur as quickly as with a somewhat weaker currency."

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