Dollar Price Predictions in the Black Market: Comprehensive Analysis of the

The black market for currency is defined as the market where foreign currencies, such as the US dollar, are traded outside the official channels approved by the government and central banks. In most economies suffering from severe fluctuations or restrictions on the withdrawal of hard currencies, a parallel market arises where individuals obtain dollars at prices different from the official rate. However, the situation in the Kingdom of Saudi Arabia is fundamentally different. For many years, the state has adopted a policy of pegging the riyal to the US dollar at a fixed rate of approximately 3.75 riyals per dollar. This policy was not only imposed to achieve financial stability but also to enhance confidence in the economic system and attract foreign investments. The Saudi Arabian Monetary Authority (SAMA) plays a pivotal role in stabilizing the exchange rate by managing a substantial foreign currency reserve, which reached about $680 billion by the end of 2024. In this organized environment, trading currencies outside licensed banks or exchange offices is considered a financial crime punishable by law. Regulatory bodies such as SAMA, the police, and the Capital Market Authority do not tolerate violations and impose strict oversight on exchange operations to ensure that demand for dollars does not leak into the informal market. Unlike some neighboring countries or emerging markets where significant discrepancies between the official price and the black market price appear, the Kingdom rarely witnesses such phenomena. Even if limited individual trades of dollars occur outside official channels, they do not represent a parallel market in the economic sense and are often secretive or of limited impact. Therefore, the discussion about dollar price predictions in the black market in Saudi Arabia remains largely a theoretical discussion based on analyzing the mechanisms of monetary stability and comprehensive government oversight, rather than the existence of an actively functioning market.

The dollar price in the black market is influenced by several factors involving macroeconomic variables, monetary policy, and geopolitical conditions. Globally, the strength of the dollar against other currencies is determined by US interest rates, inflation rates, and the level of confidence in the US economy. When the dollar weakens globally, as recent reports indicated in mid-2025, emerging market currencies tend to maintain or gain against the dollar. This situation indirectly affects economies linked to the dollar, including Saudi Arabia. Locally, potential fluctuations in the dollar price in the black market are linked to the following variables: the size of foreign currency reserves, which reached about $680 billion at the end of 2024, giving SAMA significant capacity to defend the riyal's peg to the dollar; the inflation rate, which remained low between 2% and 3% during 2024-2025; and government fiscal policy, which is based on substantial oil revenues and financing spending programs through the riyal. In countries with open or volatile markets, significant discrepancies between the official dollar price and the black market price may arise due to transfer restrictions or declining confidence in the local currency. However, in Saudi Arabia, the continued monetary stability and the absence of strict restrictions on currency transfers for legitimate purposes prevent the emergence of an actual black market. Even under external pressures, such as declining oil prices or changes in global policies, the Kingdom's ability to stabilize the exchange rate remains strong due to ample reserves and clear monetary policies. Additionally, international experiences, such as the crackdown on the black market in Pakistan in 2025, illustrate that governments with strong control can quickly eliminate any signs of monetary instability. Therefore, any predictions regarding the dollar price in the black market in Saudi Arabia must take into account this institutional superiority and sound policies that limit the emergence of a real parallel market.

Saudi monetary policy has played a crucial role in maintaining the stability of the riyal's exchange rate against the dollar for decades. The Saudi Arabian Monetary Authority (SAMA) has followed a fixed peg policy since the 1980s, where the riyal is fixed at 3.75 riyals per US dollar. This peg is managed through interventions in the foreign exchange market by buying and selling dollars to maintain the target price. This is supported by the Kingdom's possession of a large cash reserve exceeding $680 billion by the end of 2024, allowing it to absorb any external shocks or sudden demand for dollars. A stable monetary policy enhances confidence in the local currency and reduces the likelihood of an active black market emerging. In cases of global economic pressures, such as fluctuations in oil prices or changes in US monetary policy, the Kingdom remains capable of defending the exchange rate due to these reserves and flexible spending policies. During 2024-2025, the world witnessed a decline in the dollar's value against some emerging currencies due to the easing of US monetary policies, but the impact on the Saudi riyal remained limited due to the official peg. Additionally, the stability of inflation rates (2-3%) and economic growth supported by 'Vision 2030' projects contributed to strengthening the riyal's power. SAMA continuously monitors capital flows and remittance movements, implementing regulatory measures to ensure no significant unofficial currency trading occurs. Should any attempts to trade dollars outside official channels arise, regulatory authorities intervene swiftly to contain the situation. This strict system renders the black market for currency a nearly nonexistent phenomenon in Saudi Arabia, making predictions about the dollar price in that market governed by the framework of institutional stability and stringent monetary policy.

To understand the uniqueness of the Saudi market, it is essential to compare its situation with that of emerging countries that have witnessed significant activity in the black market for currency. In countries such as Egypt, Lebanon, and Syria, the black market for dollars is widespread due to restrictions on withdrawing foreign currencies or fears of the local currency's depreciation. In these countries, the dollar price in the black market often exceeds the official price by a significant margin, reflecting a decline in confidence in the monetary system and the central bank's ability to defend the currency. For example, in Pakistan during 2025, authorities launched a strong campaign against the black market for currency, temporarily strengthening the rupee, but traders resorted to online trading in an attempt to circumvent the measures. These experiences confirm that the black market for currency typically arises when there is a gap between supply and demand in the official market, or when the government imposes strict restrictions on external transfers. In contrast, Saudi Arabia is fundamentally different: there are no clear discrepancies between the official price and the dollar price in the black market, as all major transactions are documented and subject to SAMA and licensed banks' oversight. Even in cases of external pressure, such as declining oil prices or a global dollar depreciation, no detectable or measurable movement in the black market has occurred in Saudi Arabia. The comparison with other countries' experiences illustrates that the stability of monetary policy and large foreign reserves are the critical factors in preventing the emergence of a significant parallel market. In the event of limited individual trades or attempts to speculate on the dollar, the relevant authorities act swiftly to contain the situation and impose legal penalties. This context highlights the robustness of the Saudi institutional framework and makes predictions about the dollar price in the black market merely hypothetical scenarios rather than tangible economic realities.

During the period from 2024 to mid-2025, Saudi economic data showed continued stability of the riyal's price against the dollar at the level of 3.75 riyals per dollar, despite fluctuations in global markets. This stability is based on several key factors, most notably the strength of foreign currency reserves, which reached approximately $680 billion by the end of 2024. This figure reflects the Kingdom's ability to meet any demand for dollars and cover imports for several years without significant financial pressures. On the other hand, inflation rates remained low, ranging between 2% and 3% during the same period, contributing to the stability of the riyal's purchasing power. Current accounts showed a notable surplus, supported by oil revenues and 'Vision 2030' projects that stimulated non-oil economic growth. Conversely, Saudi financial authorities did not record any official activity or statistics regarding the existence of a black market for currency, confirming the effectiveness of oversight and financial regulation. It is noteworthy that forecasts from international institutions, such as Reuters surveys in mid-2025, indicated a relative weakness in the US dollar globally, but the impact on the Saudi riyal remained limited. This is due to the continued pegging policy and the absence of any official intention to modify the exchange system. In light of this data, it can be said that any discussion about dollar price predictions in the black market in Saudi Arabia remains governed by this context of monetary stability and substantial reserves, reducing the chances of fluctuations or the emergence of an active parallel market in the foreseeable future.

The cement sector in Saudi Arabia is considered one of the vital sectors that is indirectly affected by changes in the dollar price, especially in light of major government projects under Vision 2030. Since the Saudi riyal is pegged to the dollar at a fixed exchange rate, dollar stability positively reflects on the stability of production costs in cement companies, as these companies partially rely on importing equipment or raw materials priced in dollars. If a sudden change in the exchange rate were to occur (an unrealistic scenario at present), the cost of importing equipment or fuel could rise, affecting the profit margins of companies. Conversely, most sales of cement companies, including Hail Cement Company (symbol 3001), are conducted in riyals for the local market, providing them with relative immunity against dollar fluctuations. During 2024-2025, Hail Cement's stock maintained relative stability, ranging between 15 and 20 riyals, with the company's market value estimated at about 1.2–1.5 billion riyals. The price-to-earnings ratio ranged between 12 and 14, and dividends amounted to about 12–15% of the nominal value of the share. All of this reflects the sector's stability amid fixed exchange rates. Increased infrastructure projects, such as NEOM, Qiddiya, and the Red Sea, have contributed to raising local demand for cement, boosting profits for companies in the sector. In the event of a significant change in the dollar price (which is currently unlikely), cement-exporting companies could benefit from increased competitiveness of their products in foreign markets if the riyal's value decreases. However, under current conditions, the effects of dollar fluctuations on the sector remain limited, and local factors such as the size of government projects and energy prices are the most influential.

The cement sector is one of the strategic sectors in the Saudi market, driven by major construction projects and infrastructure expansion under Vision 2030. The sector includes prominent companies such as Hail Cement Company (3001), Saudi Cement (3004), Yamama Cement, and Eastern Province Cement, along with regional competitors like Qassim Cement, Al-Jouf, and Tabuk. The total production capacity of Saudi cement plants is millions of tons annually, making the Kingdom one of the largest cement producers in the region. During 2024-2025, the sector experienced relative stability as local demand remained strong due to government projects, especially NEOM, the Red Sea, and Qiddiya projects. Cement companies maintained good dividend distribution ratios, with Hail Cement distributing about 12–15% of the nominal value of the share, equivalent to annual returns of 3-4% of the share price. The price-to-earnings ratio ranged between 10 and 15 in most companies in the sector, reflecting average pricing compared to other emerging markets. The sector faces challenges such as rising energy costs due to reduced government support and increased competition for government contracts. However, the government's focus on injecting investments into infrastructure projects has created sustainable growth opportunities. Most sales are conducted in riyals, reducing the impact of dollar fluctuations on companies' profits. In the event of drastic changes in the exchange rate (an unlikely scenario), import costs may be affected, but official market mechanisms remain capable of absorbing any potential pressures. Overall, the Saudi cement sector remains an example of the strength and stability of the local economy, supported by robust monetary and fiscal policies.

Oil prices and global monetary policies play a crucial role in determining the trends of the Saudi currency, given the Kingdom's significant reliance on oil revenues to finance its balance of payments. In 2024-2025, oil markets experienced notable fluctuations, with Brent crude prices dropping to their lowest levels in years during the summer of 2025. This decline exerted short-term pressure on government revenues; however, the Kingdom compensated for this by accelerating economic transformation programs and enhancing non-oil sectors. At the same time, central banks worldwide, led by the US Federal Reserve, shifted towards easing monetary policy and lowering interest rates after years of tightening. This shift led to a weakening of the dollar against emerging currencies, as confirmed by a Reuters survey in June 2025. Nevertheless, this weakness had a limited impact on the Saudi riyal due to the fixed peg system. The stability of the Saudi exchange rate amid these changes reflects the strength of foreign reserves and SAMA's ability to intervene when necessary. The government has also not announced any intention to change the peg system or liberalize the exchange rate, repeatedly affirming its commitment to existing policies. In light of these factors, dollar price predictions in the black market remain governed by the Kingdom's ability to manage the impacts of oil prices and global monetary policies while maintaining the stability of the local currency and enhancing confidence in the national economy.

Foreign currency trading in Saudi Arabia is subject to a strict legislative and regulatory framework aimed at protecting the financial system and ensuring the stability of the local currency. The Saudi Arabian Monetary Authority (SAMA) and the Capital Market Authority impose close oversight on all dollar exchange operations and monitor the movement of funds and external transfers through licensed banks and exchange offices. Any attempt to trade dollars outside these channels is considered a blatant violation of Saudi laws, exposing offenders to severe financial and criminal penalties. Penalties include hefty fines or imprisonment, especially if the operations are linked to suspicious practices such as money laundering or terrorism financing. In recent years, Saudi authorities have intensified their regulatory measures, setting caps on monthly transfers and imposing strict disclosure requirements on financial institutions. In similar global cases, such as the crackdown in Pakistan in 2025, governments resorted to tightening oversight to eliminate the black market for currency, temporarily strengthening the local currency. In Saudi Arabia, no active black market for dollars has been recorded due to strong oversight and institutional commitment. Regulatory authorities regularly issue warnings about the risks of dealing outside official channels and emphasize the importance of resorting only to licensed banks and exchange offices. This legal framework enhances investor confidence in the stability of the financial system and reduces the likelihood of a significant parallel market emerging. Ultimately, adherence to regulations remains the main guarantee for the integrity of the monetary system and the stability of the exchange rate in the Kingdom.

Most analyses and international financial institutions indicate the continued peg of the Saudi riyal to the US dollar in the short to medium term. As of mid-2025, there are no official signals of the Saudi government or SAMA's desire to change the peg system or liberalize the exchange rate, despite significant changes in global markets. These predictions are based on several factors, including the strength of foreign reserves, the stability of the local economy, and low inflation rates. In a recent survey conducted by Reuters in June 2025 among currency analysts, most indicated that emerging market currencies would maintain their gains against the dollar over the next six months due to the global dollar's weakness. However, this scenario does not reflect the same strength on the Saudi riyal, which remains governed by the peg policy. Analyses from international banks and consulting institutions confirm that the Kingdom will continue to defend the riyal's exchange rate and will only consider devaluing it in the event of major unforeseen economic shocks. On the other hand, investors are monitoring indicators such as foreign currency reserves, balance of payments performance, and government spending levels. As long as these indicators remain strong, future predictions for the dollar price against the riyal remain stable. Should a significant change occur in any of these factors (such as a sharp decline in reserves or a sudden rise in inflation), the government may consider options to adjust the exchange policy, but so far, there are no signs of that. Accordingly, predictions regarding the dollar price in the black market in Saudi Arabia remain within the scenario of institutional stability and strict oversight.

Financial media and economic analyses play a significant role in shaping investors' expectations and public opinion regarding the dollar price in the black market, even if no active market exists in the Kingdom. Global news agencies such as Reuters and Bloomberg publish periodic reports on the performance of emerging currencies and the US dollar, while local platforms such as 'Argaam' and 'Tadawul' provide analyses of local economic trends. Future predictions for the dollar price in the black market are often drawn from these sources, despite the Kingdom not officially recognizing the existence of a parallel market. Economic analysts base their reports on indicators such as the size of foreign reserves, inflation rates, and quarterly data released by state institutions. Some analyses draw comparisons with the experiences of other countries, such as regulatory campaigns in Pakistan or price gaps in Egypt and Lebanon. However, Saudi analyses are often characterized by neutrality, emphasizing the stability of the monetary system and the absence of incentives for the emergence of a real black market. Additionally, rumors and discussions on social media sometimes influence individual expectations, but official information from SAMA and banks remains the most reliable source. Ultimately, the role of media and analyses is confined to providing theoretical scenarios while emphasizing the importance of consulting a licensed financial advisor before making any financial decisions based on these predictions.

The years 2024-2025 witnessed a series of developments that directly and indirectly affected the Saudi currency market. On the global monetary policy front, major central banks, especially the US Federal Reserve, initiated interest rate cuts, leading to a decline in the relative strength of the dollar. In contrast, the Saudi Arabian Monetary Authority maintained the peg of the riyal to the dollar unchanged, officially affirming its commitment to financial stability policies. On the local economic level, the Kingdom recorded low inflation rates (2-3%) and economic growth supported by 'Vision 2030' programs and major infrastructure projects. The cement sector, for example, saw revenue growth supported by local demand, and companies increased dividends for their shareholders. No signs of an active black market for currency were observed, and regulatory authorities continued to issue warnings against dealing outside official channels. Oil markets experienced fluctuations that temporarily affected government revenues, but the substantial foreign reserves enabled the Kingdom to absorb any potential shocks. In the business sector, expansion projects were announced in cement companies, including Hail Cement Company, in line with expected growth in the construction sector. All these developments enhance investor confidence in the financial system and support the stability of the official exchange rate, reducing the likelihood of a significant black market emerging in the near future.

Given the complexities surrounding the analysis of dollar price predictions in the black market, the importance of consulting a licensed financial advisor before making any decisions related to currency exchange or investment in foreign exchange markets becomes evident. A qualified financial advisor provides an objective analysis based on official data, considering the legal risks associated with dealing outside the approved channels in the Kingdom. Most individuals may be influenced by media reports or rumors regarding potential changes in exchange rates or the emergence of a parallel market, but the reality in Saudi Arabia imposes a highly stable and regulated monetary environment. A licensed financial advisor equips investors with updated information about government policies, economic developments, and the performance of various sectors such as the cement sector. They also help them understand the impact of any global changes on the local currency and suggest appropriate strategies to manage risks without stepping outside the legal framework. In the absence of an active black market for currency, resorting to official channels remains the optimal choice, avoiding any unauthorized exchange or trading operations. Individuals and companies' commitment to obtaining specialized advice from licensed entities ensures the safety of their financial decisions and protects them from potential legal and economic risks in the long term.