Bahrain's central bank sees no need to change its currency peg to the US dollar despite the greenback's weakness and expects the country's economy to grow by 3-4 percent this year, its governor said on Tuesday.

"We have repeatedly said our exchange rate policy will remain as is. We will maintain our peg there is no change to the policy," Rasheed Al-Maraj told reporters on the sidelines of a financial conference in Manama.

The US Fed's recent moves to pump money into the US economy has revived questions about the dollar pegs used for Gulf currencies.

Policymakers in the region have long said that dollar pegs serve their hydrocarbon-heavy economies well as long as inflation stays under control.

As key Gulf economies continue to recover, inflation has started to pick up. In Saudi Arabia, Kuwait and the United Arab Emirates it has already hit 18-month highs, though it is still far below 2008 record peaks. - Reuters