Countries with fixed currencies live with less uncertainty; however, they must maintain large stockpiles of foreign currency to artificially maintain their peg. These stockpiles are used to manipulate the value of their own currency by selling or buying large quantities of it on the foreign exchanges in an effort to devalue or revalue it respectively2.
This strategy has been extremely effective for Saudi Arabia. The value of Saudi Arabian exports (oil) is consistently higher than that of its imports3. If its currency was allowed to float, its supply on the foreign exchanges would be consistently low and therefore its value would be consistently high. This condition would lead to high levels of inflation for Saudi Arabia4.