BERNE, June 20 (Reuters) - The Swiss National Bank reaffirmed its commitment on Thursday to defend a cap of 1.20 per euro on the franc, saying the safe-haven currency remained too strong and risks were still high for the economy.
'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 monetary policy meeting.
'The SNB stands ready to enforce the minimum exchange rate, if necessary, by buying foreign currency in unlimited quantities, and to take further measures, as required.'
The SNB kept the target band for the Swiss franc LIBOR main policy rate at 0 to 0.25 percent, as all economists in a Reuters poll had forecast.
The SNB kept its growth forecast for the year at 1-1.5 percent, saying it expected the economy to weaken in the second quarter after a better-than-expected first quarter.
'A weakening in global economic momentum cannot be excluded. Further developments in the euro area financial and sovereign debt crisis remain uncertain. Tensions can reappear at any moment on global financial markets,' it said.
Growth in the Swiss economy picked up pace in the first quarter, beating even the most optimistic forecasts, as consumers, construction and trade helped the economy outperform its euro zone neighbours.
The SNB said inflation should remain low for the foreseeable future as it trimmed its inflation forecast for 2013 to -0.3 percent from a previous -0.2 percent but confirmed its forecast for prices to rise 0.2 percent in 2014 and 0.7 percent in 2015.
The SNB imposed the lid on the safe-haven unit in September 2011, citing the risk of deflation and a recession as the strong currency squeezed exporters and the tourism industry.
(Reporting by Zurich Newsroom Editing by Jeremy Gaunt.) Keywords: SWISS SNB/RATES
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