* SNB's euro holdings increase by nearly one third
* Analysts say rise probably reflects currency intervention
(Adds analysts' comments, franc, background)
By Sven Egenter
ZURICH, April 21 (Reuters) - The Swiss National Bank's euro holdings rose by nearly one third in the first quarter, the period when the central bank intervened to weaken the Swiss franc, the SNB's monthly statistical report showed.
The SNB held 20.2 billion euros in its foreign currency investments at the end of the first quarter, up from 15.7 billion euros at the end of 2008, the report, published on Tuesday, showed.
Analysts said the increase was probably due to the central bank's intervention to weaken the franc, announced on March 12 as one of the drastic steps to fight deflation, which included an interest rate cut to 0.25 percent and the purchase of bonds.
"I guess the intervention is behind the rise," said Credit Suisse analyst Marcus Hettinger.
"It'll be interesting to see the figures for the second quarter, though they probably will not have to do as much because their threat to intervene is credible for the market," he said.
UBS analyst Reto Huenerwadel said the volume of the intervention remained unclear as other factors may influence the euro holdings.
On Friday, SNB Chairman Jean-Pierre Roth also declined to comment on the volume of the intervention, saying only that the central bank had acted "decisively".
Roth also repeated the SNB's commitment to fight a renewed appreciation in the franc.
IN CHECK
The SNB's threat to intervene again to stem a rise in the franc has limited the currency's scope to appreciate despite upward pressures from worries about the global economy.
The franc traded at 1.5142 per euro by 0826 GMT, down
slightly on the day, and off the levels of around 1.48 per euro
hit before the SNB intervened.
The central bank's report showed that the euro's share of its overall currency holdings rose to 55 percent from 49.4 percent, reaching its highest level since the introduction of the common currency.
The SNB's overall holdings in foreign currency rose to 55.7 billion francs at the end of March from 46.5 billion francs at the end of February.
The SNB's dollar holdings inched up to 13.1 billion, the SNB's holdings in yen fell to 372 billion from 388.5 billion, taking their share to 26.8 percent and 7.7 percent respectively, the monthly report showed. (Reporting by Sven Egenter; editing by Chris Pizzey)