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SANTIAGO, Aug 18 (Reuters) - External risks from the Chinese economy and U.S. monetary policy could increase volatility for the Chilean peso, Chile's central bank governor said on Tuesday.
The Chilean peso has weakened sharply in recent days to a 12-year low against the U.S. dollar, as fears over the Chinese economy led the price of copper, Chile's key export, down.
Increased volatility for the peso could have a knock-on effect on inflation, said Rodrigo Vergara, central bank governor, at a business forum, acknowledging that prolonged above-target inflation in Chile "worries us as it represents a risk." (Reporting by Anthony Esposito, Writing by Rosalba O'Brien)