DUBAI, June 23 (Reuters) - 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 0955 GMT.
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)