* Roth says SNB does not want franc to rise
* Sees downside risk for economy, growth possible in 2010
* Says UBS cap hike shows returning confidence in bank
* Says has "no doubt" UBS tax row will be resolved (Adds details, franc reaction, background)
ZURICH, July 10 (Reuters) - The Swiss National Bank is sticking decidedly to its policy to prevent an appreciation of the Swiss franc, SNB Chairman Jean-Pierre Roth said in an interview published on Friday.
"We do not want a further appreciation (of the Swiss franc), because we must prevent deflation," Roth told the German daily Handelsblatt according to a version of the interview on the paper's website.
When asked what the SNB would do if upward pressure on the franc persisted, Roth said: "We stick to our policy, and that decidedly."
Roth said the Swiss National Bank was not giving a target for the exchange rate but he noted that the currency had not appreciated further.
The Swiss franc dipped after Roth's comments, trading at
1.5140 francs per euro at 0523 GMT.
The SNB has intervened several times since March to fight a rise in the franc as part of its set of drastic policy measures to keep the country out of deflation.
The central bank has also cut its target for the 3-month franc LIBOR to 0.25 percent, offering cash in its daily repo at rates close to zero, and has started to buy corporate bonds.
The SNB chairman, who will retire at the end of this year, said the central bank would withdraw liquidity once its inflation forecasts signalled the time had come.
"It is important to keep the market interest rate on the right level," he said. "But we are still far away from an interest rate turning point."
Roth repeated that the SNB expected the Swiss economy to shrink between 2.5 and 3.0 percent.
"The risks point to the downside," he said. "But we have signs that moderately positive growth rates are possible next year."
Early indicators such as the KOF growth barometer or the Purchasing Managers' Index have turned in recent months in Switzerland but real economic data have still to follow and the labour market has been deteriorating sharply.
Roth also said he had no doubt that a law suit against the
country's former flagship bank UBS
The U.S. tax authorities are seeking to force UBS to disclose 52,000 secret account holders.
Roth said UBS' 3.8 billion Swiss francs ($3.49 billion) capital hike was a positive sign.
"It shows that the market has regained confidence in the bank and that there is light at the end of the tunnel."
The SNB and the Swiss government had to rescue UBS last year, as the bank ran up the largest corporate loss in Swiss history in 2008.
(Reporting by Sven Egenter; Editing by Kim Coghill)