DUBAI - Saudi Arabia's monetary policy is to "preserve the stability" of the riyal's exchange rate, central bank governor Ahmed al-Kholifey told the newspaper Maal.

The riyal is pegged at 3.75 to the dollar but the Saudi currency has come under pressure as a result of the killing of Jamal Khashoggi, a dissident journalist.

"An increase in U.S. interest rates usually requires an increases in local interest rates or else the exchange rate becomes unstable," Kholifey said in the interview published on Monday.

"The monetary policy of the kingdom is to preserve the stability of the exchange rate in order to stabilise prices."

Riyadh initially denied knowledge of his fate before saying he was killed in a fight in the Saudi consulate in Istanbul, a reaction greeted sceptically by several Western governments, straining relations with the world's biggest oil exporter. 

(Reporting by Maher Chmaytelli; Editing by David Stamp and Alison Williams) ((maher.chmaytelli@thomsonreuters.com; +9647901917030;))