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Saudi Riyal Peg Not Sustainable Amid Oil Slide, Commerzbank Says

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Will Saudi Arabia De-Peg From the Dollar?

Saudi Arabia’s currency peg is no longer sustainable amid a slump in oil prices that threatens to further crimp government financing, according to Commerzbank AG.

The cost of buying 12-month dollar-riyal forwards has risen almost 1 percent since early December to about 3.83 per dollar, Commerzbank said in a report on Tuesday. Upward pressure on the forwards will probably increase over the “coming weeks and months,” it said. Saudi Arabia has pegged its currency to the dollar at 3.75 since 1986.