Saudi Arabia’s central bank, the Saudi Arabian Monetary Agency (Sama), has said it will maintain the riyal’s peg to the dollar at the same price.

“Sama is committed to pegging the riyal to the US dollar and the stability of the currency exchange at SR3.75 to the dollar,” Ahmed al-Khalifi, governor for research and international affairs at Sama, told the local Al-Arabiya TV station. “We have tools in this institution to help preserve the peg. In the assessment of neutral international bodies such as the [Washington-based] IMF, this policy has served the local economy.”

Increased speculation had pushed the riyal’s one-year forward price up. Investors had speculated that the riyal would be devalued by 1 per cent in the next 12 months.

The speculation, which began in July, has been driven by falling oil revenues, decreasing foreign reserves and new debt issuances.

Sama has drawn down on its currency reserves by SR272bn, or 9.8 per cent, between August 2014, when reserves peaked at SR2,764bn and June 2015, when they fell to SR2,492bn.

Riyadh has also issued SR35bn in debt since July, and plans to issue about SR20bn a month for the rest of the year to finance its budget deficit.

The fall in oil prices from more than $100 in mid-2014 to under $45 in August has put financial strain on the government. While its net financial position has eroded, it remains one of the strongest sovereigns in the world, with debt amounting to just 6.4 per cent of GDP by the end of 2015, according to US-based Moody’s Investors Service.

Several countries have devalued or liberalised their currencies in recent weeks, following China’s lead.

GCC countries are unlikely to abandon dollar pegs, as oil, which dominates economies in the region, is sold in US dollars. Devaluing would destabilise local economies and increase the cost of imported goods without boosting exports.