* Prices rise 0.3 pct m/m, fall 0.3 pct y/y
* Core inflation at -0.4 pct y/y
* SNB seen holding the cap at least through 2013
ZURICH, March 8 (Reuters) - Swiss consumer prices rose month-on-month in February for the first time since October but remained in negative territory year-on-year, lending support for the Swiss National Bank’s case to maintain its cap on the currency.
Prices fell 0.3 percent from a year ago but were up 0.3 percent from the previous month, the Federal statistics office said on Friday. Both figures were in line with average analyst forecasts.
Core inflation, which strips out more volatile components like food and beverages, seasonal products, energy and fuel, fell 0.4 percent in February.
“There is no deflation though there is still a disinflationary tendency in some of the CPI components. It means there is still time before we will see any action from the SNB,” said ZKB economist David Marmet.
Seeking to prevent deflation and a recession, the SNB capped the franc at 1.20 per euro in September 2011 after investors looking for a safe haven from the euro zone crisis had pushed the Swiss currency from one record high to another.
A strong currency pushes down prices of imports.
The franc, which weakened away from the 1.20 level at the start of the year as optimism about the euro zone’s outlook grew, strengthened 0.1 percent to 1.2352 to the euro after the inflation data. The franc rose 0.1 percent against the dollar to 0.9436.
The month-on-month rise was chiefly due to higher prices for petrol, diesel and heating oil as well as an increase in the prices of clothing and shoes as the winter sales came to an end, the statistics office said.
Robust domestic consumption has helped the Swiss economy offset weakness in the euro zone, with data published last week showing the economy grew more than analysts had predicted in the fourth quarter.
SNB Chairman Thomas Jordan said last week the central bank is far from removing the cap, pointing to new risks to the euro zone stemming from Italy’s inconclusive election result.
The central bank, which holds its quarterly monetary policy assessment next Thursday, is expected to keep its lid on the franc at least through 2013 and probably well into 2014, according to a Reuters poll of analysts. (Reporting by Caroline Copley and Martin de Sa‘Pinto Editing by Jeremy Gaunt)