(Adds comment from Carstens on inflation)
By Noe Torres
MEXICO CITY, Dec 15 (Reuters) - Mexico has no plans to increase the amount offered in dollar auctions that aim to ease a sharp slide in the peso, Bank of Mexico Governor Agustin Carstens said on Monday, but he added any impact on inflation could force the central bank to respond.
Last week, a drop in the peso, which has been hit by the fall in international crude oil prices and uncertainty over U.S. monetary policy, prompted the central bank to auction $200 million to support the currency.
Speaking after an event in Mexico City, Carstens said December was an atypical month, and that the central bank had no plans for now to increase the dollar amount offered in auctions and would continue to monitor the auctions through the first weeks of next year.
“We’ll have to see how this mechanism is working in December and also in the weeks following the start of the coming year,” Carstens told reporters.
He added, however, that the peso’s current performance could affect inflation which would force the central bank to take action.
“Obviously the exchange rate could affect inflation, which is part of our remit, and could force us to react,” Carstens said.
He added that he was calm about the performance of the peso, which he thought was undervalued.
The peso pared session losses after Carstens’ comments.
Carstens later told Mexican radio that he expected the annual inflation rate to drop around 0.5 percentage point in January, after tax hikes boosted the rate at the outset of 2014. (Reporting by Noe Torres; Writing by Gabriel Stargardter; Editing by Simon Gardner and Edmund Klamann)