How the Saudi Riyal Fared in 2025

SAR Performance Against the US Dollar

The Saudi Riyal maintained its long-standing peg to the US Dollar throughout 2025, fixed at approximately 3.75 SAR per USD, or 0.2667 USD per SAR. This stability is a cornerstone of Saudi monetary policy, managed by the Saudi Central Bank (SAMA), ensuring predictability for oil exports, which are priced in USD. Despite global economic turbulence, including US Federal Reserve rate adjustments and geopolitical tensions, the peg held firm without any devaluation or revaluation. This consistency supported Saudi Arabia’s foreign exchange reserves and helped mitigate inflation risks, allowing the Kingdom to focus on non-oil growth sectors like tourism and technology.

SAR Performance Against the Euro

The Riyal experienced a steady depreciation against the Euro in 2025, starting the year at a monthly average of 0.2577 EUR per SAR in January and ending at 0.2278 EUR per SAR in December. The downward trend was most pronounced in the first half, with a sharp drop from March (0.2472) to July (0.2280), before stabilizing with minor fluctuations in the latter months. Overall, the Riyal lost about 11.6% against the EUR over the year, reflecting the Euro’s relative strength amid the European Central Bank’s tighter monetary policy and recovering European economies. This depreciation affected Saudi imports from the Eurozone, increasing costs for machinery and luxury goods, but it also made Saudi exports more competitive in European markets.

Performance Against the Pakistani Rupee

Against the Pakistani Rupee, the Riyal showed a gradual weakening throughout the second half of 2025, starting around Rs75.63 in June and closing the year at Rs74.69 in December. Key fluctuations included a brief peak at Rs76.36 in July, followed by a consistent downward trajectory, with rates hovering around Rs75 in August before dropping below Rs75 in October and stabilizing in the Rs74 range by year-end. This represented an approximate 1.2% depreciation against the PKR, influenced by Pakistan’s improving foreign exchange reserves and remittance inflows. For Pakistan, where Saudi Arabia is a top remittance source, this meant stronger local purchasing power for incoming funds, aiding inflation control and trade balance.

Factors Affecting the Saudi Riyal in 2025

Several factors shaped the Riyal’s performance. Lower oil prices, averaging below $80 per barrel for much of the year, strained Saudi revenues, leading to a wider fiscal deficit and narrower external surplus. The IMF noted declines in oil export proceeds and higher imports of machinery for Vision 2030 projects, alongside stronger remittance outflows. Diversification efforts, including investments in non-oil sectors, helped mitigate some pressures, but budget deficits reached SAR 58.7 billion in Q1 alone. Geopolitical tensions and US Fed rate hikes indirectly affected the Riyal through the USD peg, while European economic recovery strengthened the EUR. In Pakistan, stronger reserves and remittance growth bolstered the PKR, contributing to the Riyal’s relative weakness.

In 2025, the Saudi Riyal demonstrated resilience through its USD peg but faced depreciation against the EUR and PKR, reflecting global oil dynamics and regional economic shifts. As Saudi Arabia pushes for diversification, the Riyal’s stability will be crucial for maintaining investor confidence and supporting trade. For economies like Pakistan, reliant on remittances, these movements highlight the interconnectedness of global currencies. Looking ahead, with potential oil price recovery and continued reforms, the Riyal could regain ground, benefiting Saudi Arabia’s foreign exchange reserves and overall economic stability.

Sources: State Bank of Pakistan, IMF