LONDON, Sept 7 (Reuters) - Chile’s central bank expects to raise interest rates soon, though an economic shock from China or a lasting decline in copper prices could mean rates staying on hold for longer, governor Mario Marcel said on Friday.
Marcel told Reuters in an interview that the bank’s baseline scenario was that interest rates would “go up in the next few months”.
However, potential contractionary shocks coming from a deterioration of the country’s trade partners’ economies or a lasting copper price fall would impose downward pressure on inflation, he added.
“It would widen the output gap, and it may generate an expansionary response of monetary policy or an extension of the current stance of monetary policy” Marcel said on the sidelines of an investment conference. (Reporting by Marc Jones, writing by Karin Strohecker; editing by Sujata Rao)