July 15, 2017 / 2:08 PM / 7 months ago

Chile central bank chief warns of rating cut's impact on financing costs

SANTIAGO (Reuters) - Chile’s central bank President Mario Marcel said rating agency S&P’s decision to cut the South American country’s credit rating will negatively impact external financing costs, El Mercurio newspaper reported on Saturday.

The rating agency on Thursday cut Chile’s sovereign debt credit rating to “A+” from “AA-”, the first reduction in decades, after a long period of weak growth amid low copper prices, the country’s main export product.

“This rating change has negative effects on the costs of external financing,” Marcel said. “It’s important to emphasize the importance of promoting greater economic growth that is sustainable over time.”

Marcel said that in the central bank’s next economic report, planned for September, the monetary authority would provide greater details about its medium-term growth expectations.

Chile is Latin America’s wealthiest country and remains the region’s highest-rated sovereign debt holder after a long period of stability and sound fiscal management.

Reporting by Fabián Andrés Cambero and Luc Cohen; editing by Grant McCool

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