ZURICH, Sept 18: Switzerland’s central bank on Thursday left its interest rate unchanged and pledged it would keep “generously” providing the markets with liquidity.

The target range for its three-month Libor rate has been held for the fourth consecutive time at 2.25-3.25 per cent, said the Swiss National Bank (SNB).

The bank also left its gross domestic product forecast unchanged at 1.5 to 2.0 per cent for 2008.

At the same time, inflation forecast for 2008 was kept at 2.7 per cent, although the forecast for 2009 has been raised slightly to 1.9 per cent from 1.7 per cent earlier.

In a statement, the SNB said the current level of inflation was “no more than transitory,” as an economic slowdown could hold down prices and the impact of oil price rises was expected to ease over time.

In addition, given uncertainties from the financial markets, the SNB “considers that a prudent attitude is appropriate.”

“Nevertheless, the high level of inflation at present requires that the SNB remain vigilant.

“A renewed rise in energy prices, a stronger economy than expected, a weakening of the Swiss franc or an increase in inflation expectations could all threaten medium-term price stability,” it added.

The SNB also reiterated that it was “continuing its generous and flexible provision of liquidity to the Swiss franc money market.

“Earlier on Thursday, the SNB announced measures to ease pressure on crisis-ridden money markets as part of a raft of urgent actions by other major central banks.

“Taking the market situation into account, the SNB plans to make US dollar liquidity available for as long as it considers this to be necessary,” the Swiss National Bank (SNB) said in a statement earlier.—AFP