UPDATE 1-Mexico's Carstens says could raise rates at any time to defend peso
(Adds central banker comments, market reaction)
MEXICO CITY, July 31 (Reuters) - Mexico's Central Bank chief Agustin Carstens said on Friday that policymakers could raise interest rates at any time to defend the peso, independently of what the U.S. Federal Reserve does.
Carstens told local radio that even though inflation was at a record low in Mexico and the economy was still sluggish, policymakers could use higher rates to defend the peso, which slumped in July to a record low.
"If the peso needs the reinforcement of higher rates, we will raise them independently of what the Fed is going to do," he said. "We could raise rates in August, we don't have certainty that it will happen in August. It could be at any moment."
The central bank's next scheduled meeting is Sept. 21.
Mexico's peso extended gains slightly following Carstens comments.
The peso firmed more than 1 percent after authorities boosted daily dollar auctions on Thursday and the central bank had suggested it could move outside its regular calendar. (Reporting by Michael O'Boyle; Editing by Jeffrey Benkoe)
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