he Swiss National Bank (SNB) raised interest rates by 25 basis points for the 8th consecutive time since December 2005, citing recent volatility in the Swiss franc money market. The three-month Libor rate range was raised by 0.25 percentage points to 2.25-3.25 pct, with central bank intending to keep the middle of the target range at 2.75 pct. The rate had recently climbed to as high as 2.9 pct, the SNB said. Although a majority of analysts had expected the SNB to continue to hike rates, a sizeable minority had expected a pause in its recent rate hike policy given the recent turmoil on global financial markets. The central bank said that exchange rate markets are very volatile and that over the last three months the Swiss franc/euro exchange rate has fluctuated between 1.62-1.66 points. "The volatility of the exchange rate can increase rapidly... Participants in the Swiss franc credit market and entrepreneurs should always be aware of the exchange rate risks," the SNB warned. On the other hand, despite recent turbulence on the financial markets, economic developments in Switzerland continue to meet expectations, even though the downside risks are somewhat stronger, it noted.