Swiss National Bank President Jean-Pierre Roth has pointed toward a further increase in interest rates because of the current weak state of the Swiss franc, Swiss Radio International reported on Friday.

While expressing cautious optimism about the state of the Swiss economy, Roth warned that the bank would tighten credit further as needed to ensure price stability.

"We remain cautious since the productive resources in our economy are currently more or less fully employed and the Swiss franc has depreciated on the foreign exchange market - thereby tending to make our imports more expensive," Roth told the bank's annual general meeting in the Swiss capital Bern.

"We will continue increasing interest rates to the full extent that is necessary in order to preserve price stability in the medium term," he said.

A further 25 basis point increase in interest rates - the seventh in a row - is expected at the bank's quarterly meeting in June.

The situation after that remains uncertain, as Roth told a newspaper earlier this week that the need for further increases had become less clear.

Roth said Switzerland's inflation outlook was positive despite a weak franc.

"The current situation remains comfortable due to the fact that the inflation outlook is moderate and last year's drop in oil prices is having a favorable impact on the indices," he said.

He told the meeting that he was upbeat about the Swiss economy, saying it had grown 2.7 percent in 2006 - the fastest rate in six years.

"For the current year, the outlook for growth, employment and monetary stability remain very favorable," said Roth.

Source:Xinhua