This paper introduces, formulates and evaluates an approach for damping inter-area oscillations of power systems based on supplementary current control of a line-commutated HVDC link. The proposed control is based on the model predictive control (MPC) strategy. The salient feature of the MPC as compared with other optimal control strategies, e.g., the linear quadratic Gaussian (LQG) control, is that it adjusts the control signal to achieve the objectives while explicitly respecting the plant constraints. This paper also compares the performance of the MPC with that of the LQG control. The two approaches are tested on the Western System Coordinating Council (WSCC) 9-bus system and the IEEE 14-bus system. Small-signal disturbance and large-signal disturbance stability studies are performed to demonstrate and compare the performances of the LQG and MPC methodologies. The study results show the effective and superior performance of the MPC for damping poorly damped oscillatory modes of the test systems.