Dollar Prices Today in the Saudi Financial Market and Their Impact on Sectors

The Saudi riyal is one of the few currencies globally that has been officially and continuously pegged to the US dollar since 1986, at a fixed exchange rate of 3.75 riyals per dollar. This peg is maintained by the Saudi Central Bank (SAMA) through the management of substantial foreign currency reserves, particularly in dollars. Although the official rate is stable, very slight fluctuations may occur in the interbank market or in a few exchange offices, but they typically remain within the range of 3.74 to 3.755 riyals per dollar. This peculiarity makes today's dollar price in Saudi Arabia a less volatile factor, even when significant global economic changes occur, compared to countries that rely on a free or semi-flexible exchange rate. The peg is seen as a tool for price stability and protection against imported inflationary waves, but it also obliges the Kingdom to align with US monetary policy, especially regarding interest rates. Therefore, monitoring today's dollar prices is not only about knowing the exchange rate itself but also about understanding what is happening in global financial markets and anticipating monetary movements that may affect interest rates, liquidity, and the cost of imports for local companies.

Since the mid-1980s, the Kingdom adopted a policy of pegging the riyal to the dollar after phases of limited floating and a series of international monetary crises. The primary goal of this peg was to protect the Saudi economy from fluctuations in oil prices and to reduce the risks of imported inflation resulting from exchange rate movements. Over the past decades, the Kingdom has maintained this peg despite radical changes in the global economy, such as mortgage crises, contractions in emerging markets, and finally, market fluctuations during the COVID-19 pandemic. This peg provides a clear framework for local and foreign investors and prevents fierce speculation on the currency, as seen in other countries in the region. However, this policy requires careful management of foreign reserves and ongoing coordination with US economic policy, making today's dollar prices a strategic indicator of the continuity of economic stability in the Kingdom.

Despite the stability of the official exchange rate, the Kingdom remains part of the global financial system and is affected by fluctuations in the US dollar at the international level. When interest rates rise in the United States, Saudi Arabia often raises local interest rates to maintain the attractiveness of the riyal and prevent capital flight. Additionally, the strength or weakness of the dollar globally reflects on the cost of importing and exporting goods and services priced in dollars. In recent years, with the return of global inflation and the US Federal Reserve raising interest rates, SAMA has adhered to a harmonious monetary policy, which has maintained the stability of today's dollar prices in the local market and mitigated the negative effects of any sudden changes in global markets. With increased foreign currency reserves resulting from the recovery of oil prices, the Kingdom now has a greater safety margin against any external pressures that may affect the exchange rate.

The Saudi Central Bank (SAMA) is the cornerstone of maintaining the stability of the riyal's exchange rate against the dollar. SAMA relies on managing vast reserves of dollars and other foreign currencies, enabling it to intervene immediately in the exchange market if any signs of pressure on the riyal appear. SAMA also follows interest rate policies aligned with the US Federal Reserve, creating a stable monetary environment and preventing currency speculation. In times of rising oil prices and increased revenues, SAMA strengthens reserves, while it resorts to direct intervention during periods of declining oil prices or increased government spending. This strategy has proven effective in facing global crises such as the 2008 financial crisis, the COVID-19 crisis, and fluctuations in the oil market. Thus, today's dollar prices in Saudi Arabia are closely linked to SAMA's ability to manage monetary policy and reserves efficiently.

Today's dollar prices indirectly affect Saudi companies, especially those that rely on importing raw materials, equipment, or financing in dollars. When the exchange rate is stable, these companies can plan their finances more accurately and avoid the risks of rising costs or eroding profits due to changes in global prices. Conversely, any change in the dollar price may affect companies' profit margins, especially in industrial, agricultural, and service sectors that depend on imported materials or exporting their products abroad. Listed companies on the Tadawul, such as Hail Cement Company (3001), benefit from the stability of the dollar price in pricing their products and managing their foreign currency needs for purchasing equipment or raw materials, allowing them to rely on stable costs in preparing their financial reports and future plans.

Hail Cement Company (3001) is one of the leading companies in the Saudi cement sector, primarily serving the northern region of the Kingdom. The company's stock price in early 2025 was approximately 21.30 Saudi riyals, with a market capitalization of around 5.0 billion riyals. The company recorded a price-to-earnings (P/E) ratio ranging from 15 to 18, reflecting market confidence in the company's ability to achieve future profit growth, especially with the real estate recovery and construction projects linked to Saudi Vision 2030. Regarding distributions, the company announced a cash dividend of 0.40 riyals per share in 2023, with plans to sustain distributions around 4-5% of the share value annually. Financial statements for 2024 showed revenue and net profit growth, influenced by improved domestic demand and reduced energy costs. For more details about the stock and financial indicators, you can visit the company's page on Tadawul: /stocks/3001/

The stability of today's dollar prices in Saudi Arabia gives Hail Cement Company (3001) a competitive advantage in cost management, especially as it relies on importing some materials and equipment in dollars. If the dollar rises globally or interest rate policies change, the cost of financing or imports may increase, putting pressure on profit margins. However, under the fixed peg, these risks remain limited, which is reflected in the stability of the company's financial results. During 2024-2025, the company benefited from improved demand for cement due to government and private projects, successfully increasing profits and reducing operating expenses. It is important to note that any significant change in exchange rate policy or global energy prices could reshape the company's profitability in the future, necessitating regular monitoring of monetary policy developments and dollar prices.

The Saudi cement sector is characterized by a multitude of companies and diverse distribution areas. Competition among major companies such as Saudi Cement (3050), Yamama (3040), Southern (2020), and Eastern (3052) drives efficiency improvements and cost reductions. The stability of today's dollar prices contributes to the stability of import costs for machinery and raw materials, enhancing the competitiveness of local companies. During periods of rising energy prices or global fluctuations, the stability of the dollar price has played a crucial role in containing costs. The future of the sector is linked to population growth, large projects (NEOM, Red Sea, Haramain Train), and trends to reduce carbon emissions, prompting companies to invest in modern technologies and improve production lines in line with Saudi Vision 2030.

The Kingdom of Saudi Arabia holds a leading position as the world's largest oil exporter, with oil being the primary source of foreign currency. Rising oil prices lead to increased dollar liquidity at the central bank, enabling it to maintain the exchange rate at 3.75 riyals per dollar. Conversely, declining prices or increased government spending may require SAMA to intervene to support the riyal by buying or selling dollars from reserves. Additionally, the stability of today's dollar prices contributes to more effective planning of government spending and helps the private sector in pricing long-term contracts, especially those related to imports or exports.

The monetary stability resulting from the riyal's peg to the dollar is one of the most important factors attracting foreign direct investment to the Kingdom. It provides investors with clarity regarding expected returns and reduces the risks of currency fluctuations that may affect their long-term investments. It also allows local investors to plan financially without worrying about sudden changes in financing costs or imports. As the Kingdom aims to diversify its economy and increase the contribution of the non-oil sector to GDP, the stability of today's dollar prices remains one of the essential pillars for achieving the goals of Vision 2030.

Although the Saudi market does not have an official free exchange market, there are some minor differences that occasionally appear in the buying and selling prices of dollars in limited exchange offices or between banks, usually within ±0.01 riyals around the official price. These differences do not indicate a change in monetary policy but reflect immediate liquidity requirements or transfer fees. In exceptional cases, such as holiday periods or seasons, these differences may temporarily increase. However, the official price remains the reference in all government transactions and major companies, ensuring the stability of the financial and monetary market.

The period between 2024 and 2025 recorded a notable stability in the exchange rate of the riyal against the dollar, with SAMA continuing its peg and monetary support policy. Hail Cement Company announced strong financial results for 2024, with profits growing by 10-15% compared to the previous year, supported by increased local sales and improved operational efficiency. The company's board of directors also approved the study of expansion projects such as establishing a thermal power plant, which may contribute to reducing costs in the future. On the monetary policy front, the central bank confirmed the continuity of the peg and its importance for economic stability, positively reflecting on investor confidence in the Saudi market in general and the cement sector in particular.

Despite the current stability, potential challenges remain, such as fluctuations in global energy prices, changes in US monetary policies, or new environmental and legislative pressures. Saudi companies, including Hail Cement, may resort to financial hedging tools or sign long-term contracts to mitigate risks associated with any potential changes in today's dollar prices. Additionally, investing in production technology and renewable energy techniques has become essential to meet both environmental and economic requirements. On the other hand, the stability of the exchange rate provides companies with the opportunity for regional expansion and exporting to neighboring countries without worrying about currency fluctuations.

Today's dollar prices in Saudi Arabia represent a pillar of economic and monetary stability, thanks to the official peg between the riyal and the dollar for decades. This stability positively reflects on the performance of companies, especially in industrial sectors like cement, and provides local and foreign investors with clarity in understanding returns and risks. Nevertheless, it remains essential to monitor global and local economic developments and understand the impacts of monetary policy and oil prices on purchasing power and investment costs. It is also always advisable to consult a licensed financial specialist before making any financial or investment decision to ensure the most suitable decision for personal or institutional objectives. The SIGMIX platform provides analytical tools and updated data to help individuals and companies understand the Saudi financial market more deeply.