Dollar Price in Saudi Riyal and Its Impact on Financial Market

The dollar price in Saudi Riyal is the exchange rate of the US currency against the Riyal, officially calculated at 3.75 Riyals per dollar since 1986. The Kingdom of Saudi Arabia adopts a currency peg policy, meaning that the Saudi Arabian Monetary Authority (SAMA) is committed to maintaining a nearly fixed exchange rate and intervenes in the market when necessary to limit any fluctuations. This policy was established to support economic stability, attract foreign investments, and reduce the risks of price fluctuations for commodities priced in dollars, such as oil. Thanks to this peg, the Saudi economy enjoys greater long-term financial planning capabilities, as the risks associated with changes in the local currency value compared to the dollar are minimized. Additionally, the stability of the dollar price in Saudi Riyal facilitates companies' planning for import and export operations and limits fluctuations in external debt burdens. This monetary stability is one of the fundamental pillars of the Kingdom's economic policy and affects all sectors, from local consumption to massive government investments.

The monetary stability resulting from the peg of the Riyal to the US dollar has played a significant role in protecting the Saudi economy from shocks in global markets. When global interest rates rise or fall, or when fluctuations occur in foreign currency prices, the value of the Riyal remains stable against the dollar. This stability creates an attractive investment environment, as foreign investors and local companies know that currency fluctuations will not suddenly affect their profits or costs. Furthermore, this stability helps limit inflation, as the prices of imported goods (priced in dollars) do not change significantly for local consumers. Conversely, maintaining this peg requires large cash reserves at the Monetary Authority to intervene in the market when necessary. Saudi Arabia is one of the countries with massive foreign reserves, enhancing its ability to continue the peg policy for years to come.

In the Saudi financial market (Tadawul), the stability of the dollar price in Saudi Riyal is a key factor in enhancing confidence in the national economy. Many listed companies, especially industrial ones, rely on importing raw materials or equipment from abroad, often priced in dollars. Consequently, the stability of the exchange rate helps companies develop accurate financial plans without fearing sudden cost fluctuations. Additionally, foreign investors wishing to enter the Saudi market feel more secure, as they do not face currency risk when converting their profits or investments. Moreover, the stability of the dollar facilitates financial evaluations of companies, as costs and expected revenues remain clearer, reducing the need for hedging against currency fluctuations.

According to official data from the Saudi Arabian Monetary Authority and the central bank, the dollar price in Saudi Riyal remained at 3.7500 Riyals per dollar during 2024 and 2025. The Kingdom did not witness any significant changes in the official exchange rate, despite changes in global interest rates and rising inflation rates in some major economies. Saudi Arabia maintained foreign reserves exceeding $500 billion, enhancing the Monetary Authority's ability to defend the peg in any emergency. The monetary authorities also kept local interest rates aligned with US Federal policy but without significant changes, contributing to continued monetary stability and controlling local inflation rates within 2–3%. All these factors have bolstered investor confidence in the Saudi financial market, providing a stable environment for both companies and consumers.

Industrial sector companies in the Kingdom, including Hail Cement (symbol 3001), heavily rely on the monetary stability provided by the peg of the dollar to the Saudi Riyal. These companies often import raw materials or equipment from abroad, and these transactions are typically conducted in dollars. Therefore, any fluctuation in the exchange rate would lead to sudden changes in production costs, potentially affecting profit margins. However, thanks to the stability of the exchange rate, companies like Hail Cement can better plan for capital and operational expenditures and provide accurate bids for government and private projects. Additionally, monetary stability reduces the need for financial hedging tools and provides greater transparency in preparing annual budgets and financial reports.

Hail Cement Company is one of the leading companies in the Saudi cement sector. The company is listed on Tadawul under the symbol 3001 and covers a wide geographical area in the northern part of the Kingdom. The company has witnessed significant growth in recent years, especially after acquiring Qassim Cement Company, which strengthened its position among the largest cement producers in Saudi Arabia. The company focuses on meeting the increasing local demand driven by infrastructure projects, housing, and expansions of major cities. Thanks to monetary stability and the fixed dollar price in Saudi Riyal, the company has been able to improve its operational efficiency and reduce risks associated with fluctuations in imported material prices. Additionally, the company's policy of regular dividend distribution has made it an important choice for investors seeking stable returns in the industrial sector.

Hail Cement Company achieved stable financial performance during 2024 and 2025, supported by the stability of the dollar price in Saudi Riyal. The stock price at the end of 2024 was approximately 12.00 Riyals, with a market capitalization ranging between 5–7 billion Riyals. The company recorded revenue growth due to the expansion of production capacity after acquiring Qassim Cement, doubling its capacity to about 9 million tons annually. The company's price-to-earnings (P/E) ratio was approximately 15–16 times, reflecting market confidence in the company's ability to achieve moderate profit growth. The company also distinguished itself by distributing dividends of 0.90 Riyals per share for 2022, providing a dividend yield of nearly 8% annually. The company benefited from the increasing demand for cement in the Kingdom, driven by Vision 2030 projects and major housing initiatives.

The Saudi cement sector is considered one of the essential pillars of the national economy, especially as the Kingdom moves towards implementing massive projects such as NEOM, Qiddiya, and the expansion of the Two Holy Mosques. The sector witnessed a wave of acquisitions during 2024–2025, the most notable being the merger of Hail Cement with Qassim Cement. The market is characterized by strong competition among major companies such as Yamama Cement, Arabian Cement, Najran Cement, and Eastern Cement. Companies are focusing on improving efficiency and reducing costs, with an increasing commitment to environmental sustainability standards and reducing emissions. Key challenges include rising energy costs, competition from Gulf companies, and regulatory pressures. Nevertheless, the monetary stability resulting from the fixed dollar price in Saudi Riyal has provided a favorable environment for strategic planning and sustainable growth in the sector.

The Kingdom of Saudi Arabia, as part of Vision 2030, aims to diversify its economy through the implementation of major infrastructure projects in various regions. These projects include airport expansions, highways, housing projects, and the development of new cities like NEOM. This has led to a significant increase in demand for cement and construction materials, positively reflecting on the results of companies operating in the sector, including Hail Cement. The occupancy rate of production lines rose to nearly 80% during peak demand periods, and the average price per ton of cement increased from 180 to 195 Riyals. These projects have provided opportunities for sustainable growth and prompted companies to expand their production capacity and adopt more efficient and environmentally friendly technologies.

Despite the significant opportunities in the cement sector, it faces several challenges, the most important of which are rising energy costs due to the review of fuel and electricity subsidies for heavy industries. Regulatory authorities have also imposed new specifications for industrial emissions, requiring companies to reduce carbon emissions and use more environmentally friendly technologies. Additionally, companies face competition from low-cost imports from Gulf countries and Jordan, necessitating continuous improvement in efficiency and supply chain development. Companies like Hail Cement are relatively well-positioned to face these challenges, thanks to their recent expansion and investment in modern production lines.

Oil and energy prices directly affect cement companies, as fuel (diesel and gas) is a key element in manufacturing operations. Rising global energy prices lead to increased production costs, which may pressure profit margins. In Saudi Arabia, despite policies supporting industrial energy, the government has begun gradually reviewing subsidies, impacting electricity and gas bills for factories. To address this challenge, cement companies are gradually raising their product prices while maintaining competitiveness, and they are working to improve operational efficiency and adopt alternative energy sources and low-emission production technologies.

Hail Cement faces several potential risks, including economic fluctuations that may affect the pace of construction projects and demand for cement, rising energy and raw material costs. Additionally, increased competition from regional companies or excess production may lead to pressure on local prices. The company heavily relies on the domestic market, making it susceptible to changes in government policies or shifts in demand related to major national projects. Furthermore, global changes in interest rates may affect the company's financing costs, despite the stability of the dollar price in Saudi Riyal. For these reasons, it is essential to continuously monitor economic and sectoral developments.

The years 2024 and 2025 witnessed significant developments for Hail Cement. The most notable was the acquisition of Qassim Cement, which raised the company's production capacity to nearly 9 million tons annually and strengthened its position among the largest cement producers in the Kingdom. The company financed the acquisition through capital increases and issuing new shares. Financially, the company recorded a 15% growth in net profits in the third quarter of 2024 compared to the previous year and raised dividends by 10%. The company continues to invest in modernizing production lines and adopting stricter environmental standards, enhancing its competitiveness and sustainability in future operations.

For accurate data on the dollar price in Saudi Riyal, it is advisable to follow the releases of the Saudi Arabian Monetary Authority and the central bank, which provide periodic reports on exchange rates, foreign reserves, and monetary policies. The Saudi financial market website (Tadawul) also offers comprehensive data on Hail Cement's performance (symbol 3001), including quarterly financial reports and official announcements. Local economic newspapers such as Al-Eqtisadiah and Okaz, as well as global news agencies like Reuters and Bloomberg, provide up-to-date analyses of the economic sector and energy prices. These sources ensure that investors and followers have a clear and transparent view of exchange market developments and the performance of listed companies.