Recent government restrictions on Kuwaiti banks have not affected their ability to grant loans due to abundant liquidity, the central bank governor said.

The central bank had no plans to help investment banks facing difficulties in obtaining interbank loans, Daily Al-Watan reported Sheikh Salem Abdul-Aziz Al-Sabah as saying.

"This depends on the credit decisions of the banks, and the central bank will not intervene," Sheikh Salem told Al-Watan.

Despite difficulties for some firms credit growth had risen by 19.5 percent to August from end December, he said.

Last week, the central bank said it would not hesitate to pump liquidity into the market if it became necessary after a recent slide on the local stock market.

The central bank, which is facing problems with soaring inflation, earlier this year imposed restrictions on banks to curb credit growth and forced them to increase risk weighting for some loans.

"With the current rules, the banks still have a wide field to grant loans with abundant liquidity," Sheikh Salem said.

He said the rules would affect loans to buy shares or real estate but not loans for building activities or capital increases.

The central bank has imposed the new rules as part of efforts to contain inflation rising to almost record 11.35 percent in June as food costs rose and rents stayed high, official data showed on Sunday.

The central bank has also tightened bank curbs on consumer lenders in March to control credit growth.

Kuwait dropped the peg to the dollar last year in favour of a currency basket as it pays for about a third of its imports in euros. It has allowed the dinar to rise about 8.6 percent against the dollar since then. - Reuters