Kuwait, which severed its dinar's peg to the US dollar in May 2007 because dollar weakness was stoking inflation, has been trying to rein in credit growth in an effort to dampen price rises.
"Credit growth for 2008 is expected to reach 16 or 17 per cent ... this is an acceptable number and will have positive effects on reducing inflation," Al Rai cited Sheikh Salem Abdul-Aziz Al Sabah as saying.
Annual credit growth was in the range of 35 per cent last year, he said.
This year the central bank toughened consumer lending rules and risk weightings for banks to discourage them from lending too much as inflation hit 11 per cent in April and May, driven by food and housing costs.
Sheikh Salem said Kuwait's decision to break ranks with other Gulf Arab countries and drop its dollar peg in favour of a currency basket also meant it had not been forced to track US reductions in interest rates as closely.
Kuwait lowered its benchmark discount rate, which guides banks' retail lending rates, by 50 basis points to 5.75 per cent in January after US rate cuts but has not followed further cuts that have taken the US benchmark to two per cent.
"We saw how many countries that are pegged to the dollar have reduced interest rates over the past year and half, and we only reduced them once and maintained that level of interest rate, which we consider appropriate at the current time," Al Rai quoted Sheikh Salem as saying.
The governor also reiterated his view that inflation in the Gulf Arab oil exporter was largely imported.
"Kuwait ... imports everything from goods and services... Prices in the country of origin affect the level of local inflation on one hand, and exchange rates also affect the cost of imports, insurance... and transportation," he said.
Lower oil prices would help improve the world economy, Sheikh Salem added.
Oil prices have fallen by around $30 from their July peak.