Abandoning a peg, or re-pegging at a lower value, can also damage investor confidence and prompt capital flight and volatility. A few weeks ago, Azerbaijan unpegged its manat from the dollar and the currency lost more than half its value against the greenback.
Kit Juckes, global head of foreign exchange strategy at Societe Generale, told CNBC that, with the peg being in place for 30 years, Saudi would be "very reluctant to adjust it."
"For a big commodity exporter and a big importer, the benefit of a devaluation is offset by a jump in import prices, so it's not popular, but it does help get the budget deficit down significantly by increasing domestic revenues (oil) without increasing spending so much (salaries)," Juckes told CNBC via email.
"So far, the decision to adopt fiscal austerity shows 1) that there is a huge fiscal shortfall and 2) they'd rather tighten their belts than think about devaluation. But if the oil price stays low enough for long enough and the fiscal situation doesn't improve as hoped, (who knows)," he added.
Countries looking at abandoning fixed exchange rates should proceed with caution and despite speculation over the future of the riyal, other analysts agree that Saudi Arabia is probably not at the point where it was ready to abandon its peg for the uncertainty of a floating exchange rate.
"The sharp adjustment lower in the price of crude oil has also encouraged speculation that Saudi Arabia may exit its peg against the U.S. dollar which has been in place since June 1986. However, there has been no indication this is officially under consideration," Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi UFJ, said in a note on Tuesday.
"The peg has remained in place during prior sharp adjustments lower in the price of crude oil and Saudi Arabia's FX reserves remain significant at over $600 billion. Speculators looking for a devaluation of the riyal are likely to remain disappointed in the year ahead. However, it is a tail risk which could result in a broader impact on foreign exchange market performance," he added.