Bahrain's central bank governor on Sunday urged the government to cut spending as part of the campaign to help the kingdom fight inflation which stood at 4.8 percent in February.

"In totality, we want to see lower government spending," Rasheed al Maraj told Reuters in reference to the 2009-2010 Bahrain budget.

He made the comments in an interview ahead of a World Economic Forum conference.

Like most other Gulf states, Bahrain's dollar peg forces it to track US monetary policy at a time when the Federal Reserve is cutting interest rates to help the US economy ward off recession. The economic strains caused by following Fed policy have led some Gulf officials to call for a revaluation of dollar pegs to help tackle inflationary pressures. - Reuters