By Aislinn Laing and Froilan Romero
SANTIAGO (Reuters) - The Chilean peso closed at a historic low on Monday, falling 1.82% to 841.50 to the dollar as fears over the global coronavirus outbreak and widespread protests continued to rattle the copper-rich South American nation.
The peso has been slammed by volatility linked to the impact of the worldwide spread of the virus, which initially broke out in China. Continuing protests over inequality and social injustice have also weighed on the economy and the currency.
Finance Minister Ignacio Briones told reporters the virus was a "relevant shock" to the Chilean economy, but that the world's top copper producer was able to respond if necessary.
"There have been volatile movements in international financial markets that have impacted us, but the government and the country of Chile have the mechanisms to respond," Briones said.
He warned against "overreacting to these effects from international markets."
Chile's central bank said in a statement it had "instruments" to deal with the situation and extraordinary facilities to bolster liquidity in dollars and pesos, which could be adjusted to the needs of the economy.
"The exchange intervention program is still in force and can be reactivated in the face of a resurgence of volatility of internal origin," the bank said.
"Monetary policy is in a clearly expansive provision and has space to react to changes in the outlook for inflation."
Chile's economy is largely driven by exports, ranging from copper to salmon, wine and fruits and vegetables. The virus outbreak has hit Chinese demand for copper, Chile's biggest export.
(GRAPHIC: Chilean peso routed - https://fingfx.thomsonreuters.com/gfx/editorcharts/CHILE-PESO/0H001R8F9C7H/eikon.png)