ZURICH, Jan 15 - Swiss money market rates traded virtually unchanged on Thursday with dealers expecting short-term rates to remain in their current range as long as the Swiss National Bank leaves it repo offerings at 0.11 percent. Tomorrow/next day rates were trading between 0.10 and 0.13 percent in quiet dealing, traders said, with overnight money quoted slightly lower. "It remains quiet at the short end," said one dealer. "As long as the SNB will keep offering (liquidity) at 0.11 (percent) it will stay that way and will only be influenced by external conditions such as currency moves." The Swiss National Bank offered overnight and one-week money market liquidity via repurchase agreements at 0.11 percent, the same level it has maintained since April 2, 2003.
It has said it will not move interest rates from record lows before it is sure an economic recovery has firmly taken root. "The SNB has gained time now through the external currency conditions," the dealer added. "I still believe that independent of what the ECB (European Central Bank) and other banks do the SNB will hike rates by 50 basis points in the first half this year." The franc has lost ground against a soaring euro -- the currency of its main trading partners -- and stands strongly against a weaker dollar. Three-month interest rate futures priced in slightly lower rates of some 0.31 percent by the end of March, 0.51 percent by mid-year and unchanged rates of 0.75 percent by the end of the third quarter <0#FES:>. The SNB's policy benchmark -- the three-month Swiss franc London Interbank Offered Rate (LIBOR) -- was fixed at 0.24000 percent on Wednesday, unchanged from Monday and Tuesday and just below the SNB's effective 0.25 percent target level in its 0.00-0.75 percent reference range.//