The OECD said the Swiss National Bank should not rush to raise interest rates, keeping rates low until the economic recovery is firmly established. "Keeping monetary policy easy is ... necessary, until there are clear signs that a solid recovery is underway. Monetary conditions will eventually have to move towards a neutral stance. But the SNB ... can afford to act very gradually," the organisation said in a report on the Swiss economy. The SNB raised its target for the three-month Libor rate by 0.25 percentage points to 0.50-1.50 pct on Dec 15. Rates have been negative in real terms for more than three years so some tightening will be needed as the economy picks up, but it is important not to rush this, the OECD said. "Persisting with an easy monetary policy stance is fully justified by the weakness of inflationary pressures, despite high energy prices, and the uncertainty surrounding the strength of the recovery," it said. The OECD report was finalized on Nov 25, before the recent SNB rate hike. The organisation reiterated its forecast that Swiss GDP growth will pick up to 1.7 pct in 2006 and 1.8 pct in 2007, after slowing to 1.2 pct last year. "With an easy monetary policy stance and the positive effects of the rise in the dollar since early 2005, the economy should gain traction gradually," it said. But the economic upturn remains vulnerable, it said. "Heightening tensions in the oil market and another setback in the European recovery could delay the recovery once again and limit its strength," it said.