Saudi Arabian banks are under orders to stop selling currency products that allow investors to make cheap bets on a devaluation of the riyal, according to five people with knowledge of the matter. The Saudi Arabian Monetary Agency told banks to halt the sale of options contracts on riyal forwards at a meeting in Riyadh on Jan. 18., the people said, asking not to be identified as the information is private. The directive applies to local banks and the Saudi branches of international banks, the people said. Bets for a devaluation of the riyal reached their highest in almost two decades this month, driving 12-month forward contracts for the riyal to their highest since at least December 1996. Saudi Arabia pledged on Jan. 11, the second time in four months, to stick with its currency peg. SAMA will “uphold its mandate" of maintaining the riyal at 3.7500 per dollar, Governor Fahad Al-Mubarak said at the time. SAMA declined to comment when contacted Wednesday by telephone. “We have observed volatility in the dollar versus riyal forward market due to the mispricing linked to market operators’ misperception about Saudi Arabia’s overall economic backdrop,” Al-Mubarak said. (Bloomberg)