Ever tried to push a brick wall? That’s basically what it feels like for traders trying to bet on any major movement of the dollar against Saudi riyal. For nearly four decades, the rate has sat at 3.75 like it's carved into the side of a mountain.
It’s one of the most stable relationships in the financial world. Since June 1986, the Saudi Central Bank (SAMA) has kept the riyal locked to the US dollar. If you’re looking at a chart today, January 12, 2026, you’ll see the same numbers you saw years ago. 3.7500. Maybe 3.7505 if the market is having a particularly "wild" afternoon.
But why? And is it actually as permanent as it looks?
✨ Don't miss: How Much Is 1 Share of Tesla Stock: Why the Price Keeps Moving in 2026
The Math Behind the 3.75 Anchor
The logic is pretty straightforward. Saudi Arabia sells oil. Oil is priced in dollars. By pegging the riyal to the greenback, the Kingdom ensures that its biggest revenue stream doesn't bounce around every time a central banker in Washington or Riyadh sneezes.
It provides a massive "predictability" shield.
Imagine running a country where your entire budget is based on a commodity whose price swings 5% in a single day. Now imagine your currency also swings 5% against that commodity's price. That’s a recipe for a heart attack. The peg removes half of that volatility instantly.
Honestly, the dollar against Saudi riyal rate isn't just a number; it’s the bedrock of the Saudi fiscal policy. When the US Federal Reserve moves interest rates, SAMA almost always follows suit within hours. They have to. If they didn't, money would either flood out of the country or rush in so fast it would break the system.
Is the "Petrodollar" Era Ending?
You've probably heard the whispers. People keep talking about "de-dollarization" and the rise of the "Petroyuan."
📖 Related: Why Our Mistake Is Your Responsibility and How Companies Shift the Burden
At the World Economic Forum in Davos back in 2023, Saudi Finance Minister Mohammed Al-Jadaan said the Kingdom is open to discussing trade in currencies other than the US dollar. That sent shockwaves through the forex markets. However, talk is cheap. Moving a multi-trillion dollar economy off a 40-year-old peg is... not.
The Reality Check
- Foreign Reserves: SAMA holds hundreds of billions in USD-denominated assets. As of late 2025, Saudi holdings in US Treasuries remained north of $140 billion. You don't dump that kind of position overnight.
- Import Costs: Saudi Arabia imports a huge amount of food, tech, and machinery. Most of that is invoiced in dollars. A weaker riyal (which would likely happen if they de-pegged) would make every loaf of bread and every iPhone in Riyadh way more expensive.
- Vision 2030: The Kingdom is currently in the "capital-intensive" phase of Vision 2030. They are building cities like NEOM from scratch. To do that, they need stable, predictable access to global capital. The peg provides exactly that.
What Happens if the Dollar Against Saudi Riyal Actually Moves?
Speculators love to poke at the peg whenever oil prices dip. We saw this in 1993, 1998, and even during the 2016 oil glut. Traders start buying "forwards"—basically betting that in 12 months, the riyal will be worth less.
Every single time, SAMA has stepped in and basically said, "Try us."
They have the "firepower" to defend it. With foreign exchange reserves covering over 12 months of imports, they can buy up every single riyal on the market if they need to. For a de-pegging to happen, you’d need to see oil prices stay below $40 for years, or a fundamental shift where Saudi Arabia decides that being tied to US monetary policy is hurting them more than the stability is helping.
The 2026 Outlook for Investors
If you’re holding SAR or USD, the "boring" news is the best news. The dollar against Saudi riyal isn't going anywhere soon.
🔗 Read more: Old Guard: Why These Gatekeepers Still Control the World Around You
However, there is a new wrinkle. Just this month, in early January 2026, Saudi Arabia officially opened its equity markets to all foreign investors, scrapping the old "Qualified Foreign Investor" (QFI) rules. This is huge. It means more "fresh" dollars flowing into the Tadawul (the Saudi stock exchange).
More inflows usually mean a stronger currency, but because of the peg, that pressure won't change the exchange rate. Instead, it just piles up in SAMA’s reserves, making the peg even harder to break.
Actionable Insights for Your Portfolio
If you are dealing with transactions involving the dollar and the riyal, don't waste money on complex hedging strategies to protect against "currency risk." The risk is almost zero in the short to medium term.
Focus instead on the interest rate differential. Since SAMA tracks the Fed, you should be watching Jerome Powell’s press conferences more closely than any news out of Riyadh if you want to know where Saudi borrowing costs are headed.
Your next steps:
- Monitor the Fed: If the US cuts rates in mid-2026 as some analysts predict, expect Saudi banks to follow suit, which will lower the cost of SAR-denominated loans.
- Watch the Tadawul: With the new 2026 openness to foreign investors, look for high-liquidity sectors like banking and materials that benefit from dollar-pegged stability.
- Review Contracts: Ensure any long-term business agreements in the Kingdom still use the 3.75 benchmark to avoid "valuation" disputes, even as other countries experiment with non-dollar trade.