At its quarterly assessment of the situation in December 2002, the National Bank had expected economic growth in Switzerland to be around 1% in 2003 and that a sustained upswing would not set in before the second half of the year. On the assumption that the three-month Libor rate would remain steady at 0.75%, it forecast inflation rates between 0.7% (annual average 2003) and 1.6% (2005) in the next few years. It therefore seemed appropriate to leave the target range for the three-month Libor rate unchanged at the level of 0.25% to 1.25% applicable since 26 July 2002.
