SANTIAGO (Reuters) - Chile's central bank held the benchmark interest rate at 3.5 percent on Tuesday, as expected, but adjusted its previously neutral bias to indicate that monetary stimulus may soon be on the cards.


The bank has kept the interest rate <CLINTR=ECI> at 3.5 percent through 2016, but many in the market have predicted a return to easing in early 2017 on continued weakness in the economy coupled with rapidly cooling inflation.


"The board considers that, should recent economic backdrop trends continue, alongside their implications for the medium-term outlook on inflation, it will be necessary to increase monetary stimulus," said the bank in its post-meeting statement, the first with new governor Mario Marcel at the helm.


The economy of the top copper exporter has struggled with anemic growth in recent years, hurt by a slide in the price of copper and low business confidence.


Earlier on Thursday, Fitch ratings agency downgraded its outlook on the country's debt to negative, while maintaining its A+ rating, citing the effect on public finances of the prolonged period of weak growth.

"Consensus expected a hold in this meeting, but there had been speculation about a change in bias towards a more expansive policy, which has been confirmed," said Banco Internacional trading manager Jaime Fernandez.

"We expect a 25 basis points cut in January and a second cut in the first half of next year."

(Reporting by Rosalba O'Brien; Editing by Diane Craft and Sandra Maler)