MEXICO CITY, Jan 23 (Reuters) - Mexican Central Bank Governor Agustin Carstens on Friday said the European Central Bank’s new bond-buying program would strengthen the peso, which has been battered by a slump in oil prices.
“When quantitative easing was full steam, we were receiving a lot of capital inflow,” Carstens told Bloomberg Television. “We probably will get a similar though more tamed effect now with the European Central Bank movement.”
“In a way it helps because it keeps the peso relatively strong, and that obviously helps inflation,” he said.
Mexico’s peso has fallen more than 11 percent against the U.S. dollar since early September due to a slump in world oil prices , even as inflation plunged below the central bank’s ceiling in early January.
The ECB said on Thursday that it would launch a government bond-buying program to pump up to one trillion euros of new money into the sagging euro zone economy. (Reporting by Mexico City Newsroom; Editing by James Dalgleish)