Swiss central bank to continue gradual tightening

ZURICH, Mar 16 (Reuters) The Swiss National Bank will continue its gradual tightening campaign if the economy expands as expected, it said on Thursday after it raised interest rates by a quarter point.

''Provided that the economy continues to perform as expected, the Swiss National Bank will further pursue the gradual adjustment of its monetary policy,'' it said in a statement.

The SNB expects the Swiss economy to expand by 'a little more than 2 per cent' this year, unchanged from its previous forecast.

The central bank forecast annual inflation to average 1 per cent this year from a previous forecast of 0.8 per cent.

It forecast inflation in 2007 at 1.1 per cent from a previous 1.2 per cent and 2.0 per cent in 2008.

REUTERS SD