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National bank warns of hard times for economy

The head of Switzerland's central bank says 2010 will be tough for the economy, which will not recover quickly from the world's financial crisis.

The bank's president, Jean-Pierre Roth, said growth in Europe, which absorbs most of Swiss exports, "will be even weaker than the global toll".

But immigration to Switzerland, particularly among skilled workers, had helped steady consumption and keep internal demand on track.

"There is still concern that 2010 will be difficult," he told a news conference in Geneva on Tuesday. "The exit of recession will be much longer than we observed in previous cycles."

Roth confirmed the Swiss National Bank's (SNB) previous forecast of a decline in gross domestic product (GDP) of 1.5 to 2.0 per cent in 2009. Its next policy meeting is on December 10.

The SNB has taken a number of extraordinary measures to soften the impact of the worst economic downturn in decades on the Swiss economy.

The bank has cut its target for the three-month Swiss franc Libor (London Interbank Offered Rate) to 0.25 per cent, offering cash in its daily operations at rates close to zero and bought corporate Swiss franc bonds.

It has also intervened on foreign exchange markets to stop the Swiss franc rising against the euro and to fight deflation.

swissinfo.ch with agencies


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