DUBAI, June 23 The Saudi riyal fell sharply
against the U.S. dollar in the forwards market on Monday because
of the conflict in Iraq, bankers and traders in Dubai said.
One-year dollar/Saudi riyal forwards jumped as high
as 50.50 points, their highest level since the Arab Spring
uprisings hit the Middle East in March 2011, from Friday's close
of 25.00 points. The forwards later fell back to 38.00 points at
A banker at a major institution in Dubai said hedge funds
and proprietary trading desks were trading the forwards in
response to insurgent gains in Iraq, though he added that the
market was not panicking and volumes remained moderate.
The Saudi riyal is pegged to the dollar, so forward
contracts are often used as a proxy for trading the region.
(Reporting by Archana Narayanan; Writing by Andrew Torchia)