Swiss central bank to keep monetary policy on hold next week: Reuters poll

ZURICH (Reuters) - Switzerland's central bank is expected to stick to its script of negative interest rates and a commitment to foreign currency interventions when it gives its latest monetary policy update next week, a Reuters poll found.

Despite improving economic developments and mounting criticism of its negative rates, the Swiss National Bank will keep the tools it has deployed since January 2015 when it scrapped its policy of limiting the franc at 1.20 to the euro.

All but two of the 31 economists polled by Reuters expect the SNB on Sept. 15 to keep its target range for the three month London Interbank Offered Rate at -1.25 percent to -0.25 percent, while all but one expected it to retain a negative rate of 0.75 percent on deposits it holds for commercial banks above a certain threshold.

The measure is designed to reduce demand for the Swiss franc, which has traded between 1.08 and 1.09 francs per euro for much of 2016.

Despite SNB interventions to limit the franc's appreciation following Britain's vote to quit the European Union, the highly valued currency remains a headache for Switzerland's export-orientated economy, economists said.

"If you look at the development of the Swiss economy and the franc over the last few months, at least since the last assessment, there is nothing that would imply a change," said Maxime Botteron, an economist at Credit Suisse.

"Growth is moderate, inflation is still negative, there's been no major movement in the exchange rate."

Botteron expects the SNB to maintain its current policy until at least the end of 2017.

The bank is also expected to maintain its policy of negative rates, despite it being criticized by pension funds, banks and savers, economists said.

The central bank will monitor the actions of the U.S. Federal Reserve and the European Central Bank as well as look for signs of uncertainty in the euro zone - which could lead to a rise in the value of the franc - before changing course, said Peter Rosenstreich, head of market strategy at Swissquote Bank.

"The SNB has to see what happens elsewhere before they react," Rosenstreich said.

($1 = 0.9680 Swiss francs)

(Polling by Shrutee Sarkar and Purnita Deb; Editing by Hugh Lawson)