Saudi Arabia Monetary Agency (Sama) has issued a statement insisting it will maintain the riyal’s peg to the US dollar at SR3.75 to $1.

The Saudi riyal-dollar forwards hit 975 points on 8 January, according to Bloomberg, the highest since 1996. It was at 875 points at 10:51am local time on 11 January.

This is the second time in six months Sama has been forced to comment on the matter by currency speculation.

“Of late we have observed volatility in the USD/SAR forward market due to the mispricing linked to market operators’ misperception about Saudi Arabia’s overall economic backdrop,” said the statement from Sama Governor Fahad Al-Mubarak.

“Saudi Arabia’s key economic and financial indicators are stable, as reflected by its net creditor position with a sound and resilient banking system.”

Speculation is based on increasing tension with Iran pushing down oil prices, and further weakening Saudi Arabia’s fiscal position.

However, analysts from Bank of America Merrill Lynch (BoAML) do not believe the peg is under threat. The last speculative attack on the riyal was in 1993, when reserves were just $5.9bn, or 4.3 per cent of GDP.

Sama had SR2,383bn ($655bn) in foreign reserves as of November 2015, although this is a 14.2 per cent decrease year-on-year. Gross government debt is at just 1.7 per cent of GDP, according to IMF estimates.

BoAML estimates that given current reserves and the fiscal consolidation measures in the 2016 budget, Riyadh can delay a currency devaluation for at least five years.

Bahrain, Saudi Arabia, Oman, Qatar and the UAE benefit from currency pegs which keep oil revenues more predictable and inflation low. Observers within the kingdom were not surprised by the statement.

”The currency peg is an anchor for the economy and will continue to serve economic stability,” says Fahad al-Turki, chief economist and head of research at Riyadh’s Jadwa Investment. ”The economic fundamentals are not calling for an change in foreign exchange policy.”

The recent fall in oil prices to as low as $33 a barrel will increase pressure on the pegs.

BoAML says the Omani riyal is the most vulnerable peg. The sultanate has foreign reserves of just $18.4bn or 30.6 per cent of GDP, as well as sovereign wealth funds worth an estimated $13bn.