Saudi cbank says riyal-dollar peg here to stay

Saudi Arabia will keep its riyal pegged to the US dollar, despite recent fluctuations in the forwards market and concerns over the kingdom’s economy, the central has confirmed.

In a statement released on Monday, the Saudi Arabian Monetary Agency (SAMA) said it would “uphold its mandate of maintaining the peg at SAR 3.75 per USD, backed up by the full range of monetary policy instruments including its foreign exchange reserves.”

SAMA attributed the volatility in riyal futures to “incorrect perceptions” from some traders in the market, and described key economic and financial indicators as stable and reflective of the country’s net creditor position with a "sound and resilient" banking system.

The move comes after months of speculation over the Saudi currency, which has come under pressure amid an oil slump.

Last week, the riyal fell near to a record low, as one-year dollar/riyal forwards climbed to 825 points, according to Thomson Reuters data.