Swiss central bank seen downbeat as set to keep lid on franc
* Monetary policy announcement due at 0830 GMT
* SNB seen keeping rates at virtually nil into 2014
* SNB seen defending lid on franc through 2013
* SNB seen forecasting 1 percent growth in 2013
ZURICH, Dec 13 (Reuters) - The Swiss National Bank is expected to give a downbeat economic outlook and reiterate its determination to keep the lid on the franc at its quarterly monetary policy meeting on Thursday. It imposed a cap on the franc at 1.20 per euro in September 2011 to try to prevent deflation and a recession, after investors seeking a safe haven from the euro zone crisis had pushed the currency up by a quarter in just a few months. A Reuters poll predicts the SNB will reiterate its commitment to the policy and keep its target range for the Swiss franc LIBOR, its benchmark interest rate, at 0 to 0.25 percent. Most economists see the central bank maintaining the cap on the franc through 2013 and they also expect rates to be held ultra-low until the second quarter of 2014. SNB Chairman Thomas Jordan said recently Switzerland needs to keep a lid on the franc for the time being or risk threatening price stability and economic growth. "Concerns about the economic situation globally, the historically low capacity utilisation prints in Switzerland, the resulting risk for a deteriorating labour market likely weigh on the SNB's growth outlook," said UBS economist Reto Huenerwadel. Economists expect the SNB to predict growth of 1 percent for 2013 and confirm its growth forecast for 2012 of 1 percent. The SNB looks set to stick to its prediction for prices to fall 0.6 percent this year, and will forecast inflation of just 0.2 percent in 2013 and 0.5 percent in 2014, far below the SNB's 2 percent threshold for stable prices. The Swiss economy grew at a faster-than-expected 0.6 percent in the third quarter after a 0.1 percent contraction in the previous three months but is seen struggling again in coming months as demand stays muted in the euro zone. The prospect of the SNB trying to weaken the franc further has receded as the currency has slipped of its own accord against the euro as market concern about the single currency bloc has eased somewhat in recent months. The SNB's foreign exchange reserves fell for a second month running in November, illustrating little need for the central bank to intervene to defend the 1.20 limit. But the reserves are still equivalent to 72 percent of gross domestic product after heavily interventions earlier in the year. A majority of economists do not expect Swiss officials to resort to additional measures to deter safe-haven flows if the euro zone crisis continues to fester. Of those who did expect further measures, a charge on sight deposits - the cash commercial banks hold with the central bank - was considered the most likely, followed by forcing commercial banks to charge offshore clients to hold franc deposits.
(Editing by Jeremy Gaunt.)