By Neil MacLucas 

ZURICH--The Swiss National Bank repeated Thursday that it will intervene in the foreign exchange market to prevent the Swiss franc from surpassing 1.20 against the euro, saying the limit remains the "key instrument" to curb upward pressure on the currency.

Switzerland's central bank imposed the minimum exchange rate three years ago. It also kept its target range for the three-month London interbank offered rate, or Libor, a key interest rate, at 0.0% to 0.25% for the 13th successive quarter.

"The SNB will continue to enforce the minimum exchange rate with the utmost determination," the Zurich-based SNB said in a statement following its regular quarterly policy review, adding that the currency was still highly valued. "It is prepared to purchase foreign currency in unlimited quantities, and if necessary, it will take further measures immediately."

The central bank has monitored exchange-rate moves over fears that a strong franc could threaten the competitiveness of Swiss exporters in the European Union, their biggest market. The SNB introduced the floor shortly after the Alpine country's currency neared parity with the euro in the summer of 2011.

The SNB kept its 2014 outlook for Swiss inflation unchanged at 0.1%. However it lowered its projection for 2015 inflation to 0.2% from the 0.3% forecast in June. In 2016, the bank said it expected inflation of 0.5%.

Thus "for Switzerland, the risk of deflation has increased again," the bank said in a statement.

The bank trimmed its forecast for gross domestic product growth this year to "just below 1.5% from the 2% projected in June. The SNB said the economic outlook has "deteriorated considerably" since its previous assessment in June.

Write to Neil MacLucas at neil.maclucas@wsj.com