By Dave Graham and Luis Rojas

MEXICO CITY, Oct 14 (Reuters) - Rich countries must urgently take advantage of looser monetary policy to stabilize their economies and stimulate growth, without relying solely on central banks, Mexican central bank governor Agustin Carstens said on Monday.

He was speaking as lawmakers in the United States haggled over the U.S. debt ceiling while the world's No.1 economy stares down the barrel of a potentially devastating debt default.

Central bankers in several advanced economies have opened a space for their governments to implement fiscal, financial and regulatory reforms that should be seized, Carstens told central bankers from Europe, the Americas and Asia gathered at a forum in Mexico City on Monday.

"It is urgent that the countries most affected by the crisis effectively use this window of time that the central banks have offered," Carstens said. "Monetary policy alone can't solve the problems economies are suffering from."

Carstens said he believed a U.S. default was a remote possibility, and if it were to happen, could create financial volatility.

"No one would win," Carstens said.

U.S. Federal Reserve Chairman Ben Bernanke, who did not attend the gathering, addressed the policymakers in a pre-recorded video and made no comment on the current outlook for the U.S. economy or monetary policy, instead praising the Mexican central bank.

In Mexico, visiting Polish central bank governor Marek Belka said central bankers were keeping their fingers crossed for a solution.

"The problem is that the world has never faced such a possibility," he said. "I think we are not prepared for it, simply."

U.S. President Barack Obama said on Monday there seemed to be progress in Senate fiscal impasse negotiations but that there is a good chance the United States will default on its debt if Republicans are unwilling to set aside some partisan concerns.

U.S. senators later hinted that a possible fiscal deal could come as soon as Tuesday.

Carstens previously said Mexico was well placed to weather a U.S. default, citing $170 billion in Mexican reserves and its flexible credit line from the International Monetary Fund for use in an emergency.

"Mexico is well prepared to confront it," Carstens told El Economista in an interview published on Sunday evening. "We have taken due care in the management of international reserves and we are well provisioned."

"The problem is so serious because the obstacle is political in nature, not financial nor economic."

The chief economist at Mexico's finance ministry, Ernesto Revilla, said last week that Mexico's slowing economy could face an "extreme situation" if the United States fails to raise its debt ceiling.