The pressure on Saudi Arabia to reconsider its currency peg has been building up owing to the long period of falling oil prices. Since 1986, the riyal is officially pegged to the IMF's special drawing rights (SDRs). In practice, it is fixed at 1 U.S. dollar = 3.75 riyals. This rate was made official on January 1, 2003.

Bloomberg reports that the country has been pumping record amounts of oil this year, in an effort to help OPEC defend its market share. Recently, contracts used to speculate on the riyal’s exchange rate in the next 12 months hit a 13-year high, reflecting the increasing bets for the riyal to weaken for the first time in almost 30 years.

According to Bank of America Corp., the kingdom faces a “critical” choice next year: either cut production to help boost prices or adjust the riyal’s rate to curb the decline in foreign reserves, as reported by Bloomberg.

“A depeg of the Saudi riyal is our number one black-swan event for the global oil market in 2016, a highly unlikely but highly impactful risk," Bank of America strategists led by Francisco Blanch in New York wrote in a Nov. 19 report. “It is a lot easier politically to implement a modest supply cut at first than allow for a full-blown currency devaluation."

Sputnik News says that riyal devaluation would significantly affect crude prices, triggering another wave of devaluations across the commodity-dependent economies.

Jason Tuvey, London-based Middle East economist at the research house Capital Economics, told Bloomberg in an e-mailed report that the government has "plenty" of options to avoid currency devaluation. If authorities don’t cut oil production, they are more likely to cope with low prices by cutting capital spending, already underway, or energy subsidies before weakening the riyal as "a very last resort," he said .