Kuwait let the dinar fall against the dollar on Sunday after the US currency posted its biggest one-day gain against the euro in almost three years.

The dinar, which was left unchanged for two trading days, will trade around a mid point of 0.27420 per dollar, compared with 0.27390 a day earlier, the central bank said.

The 0.11 percent depreciation was the currency's biggest since Dec. 2.

The dollar surge follows inflation data that reduced expectations of more interest rate cuts. US consumer price inflation rose to 4.3 percent for the November year, its highest level since June 2006, trimming expectations for further interest rate cuts by the Federal Reserve.

By late New York trading on Friday, the dollar had gained 1.37 percent on the euro and 1.04 percent versus the Swiss franc.

The currency of Kuwait, the Middle East's fourth-largest oil exporter, has risen 5.45 percent since May 19, a day before the central bank started tracking a basket of currencies. Kuwait has declined to give the composition of the basket.

Kuwait's central bank says the dollar's decline on global markets was driving up inflation and making some imports more expensive. Kuwait pays for more than a third of its imports in euros. - Reuters