The Saudi riyal rebounded against the US dollar during early trade on Tuesday after a CNN report that Riyadh was preparing to acknowledge the death of journalist Jamal Khashoggi during a wrong investigation.

 

The Saudi currency recovered to 3.7514 to the dollar after plunging to a two-year low of 3.7526 on Monday on fears that Khashoggi's disappearance could hurt foreign investment in Saudi Arabia.

 

The riyal is pegged at 3.75 to the dollar and any moves beyond 3.7498 to 3.7503 are rare.

 

In the one-year futures market, which banks use to hedge against possible future currency movements, the dollar fell to 50 pips against the riyal - returning to the range of the past few months - from the 100-point mark on Monday.

 

CNN quoted two unnamed sources as saying that Saudi Arabia was preparing a report recognizing Khashoggi's death as a result of a wrongful investigation. The New York Times quoted a source familiar with Saudi plans as saying the Saudi government would blame an intelligence official for the operation that went wrong.

 

A Gulf banker said blaming the Khashoggi case for errors made by low-level officials would allow the Saudi government to say it had never ordered his disappearance and could help calm international outrage over the case.