Monetary policy in the State of Kuwait is set and implemented by CBK in accordance with the Law No. 32 of the year 1968 concerning Currency, the Central Bank of Kuwait and the Organization of Banking Business. Monetary Policy's prime objective is to maintain monetary stability with the aim to mitigate the impacts of inflation. A related objective mandated by the Law is that monetary policy should be managed in such a manner as to enhance the social and economic progress and growth of national income.
CBK also focuses its efforts toward maintaining financial stability of banking system through the use of macroprudential instruments including monitoring bank liquidity, bank credit, and introducing and monitoring prudential regulations.