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Swiss central banker sees more rate hikes, to keep inflation below one percent

GENEVA, May 13, 2007 (AFP) - Further increases in Swiss interest rates are still on the cards, one of Switzerland's central bankers said Sunday, while also praising the management of the euro currency.
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The eurozone is Switzerland's biggest foreign trade market.

Thomas Jordan, who joined the board of the Swiss National Bank on May 1, told the Sunday newspaper NZZ am Sonntag that the risk of inflation in Switzerland has been dampened despite the relative weakness of the Swiss franc, especially against the euro.

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Jordan said Swiss inflation was expected to increase from about 0.5 percent currently "to reach about one percent towards the end of the year.

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The SNB's last official forecast in March was for an average inflation rate of 0.5 percent for the whole of 2007.

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"From today's outlook, the phase in which further increases in interest rates are necessary appears not to be completely over yet," Jordan told the paper, while acknowledging that each decision was now more complex to assess following successive hikes since 2004.

The SNB last raised its key three-month Libor interest rate by a quarter of a percentage point to a range between 1.

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75 percent and 2.75 percent on March 15.

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