RIYADH, Jan 11 (Reuters) - Saudi Arabia's central bank governor said on Monday recent volatility on its currency in the forwards market is due to speculation based on unrealistic expectations.

The Saudi riyal hit a record low on Jan. 7, amid renewed speculation that the kingdom may be forced to depeg the riyal from the U.S. dollar due to sliding oil prices and the subsequent strain on Saudi state finances. urn:newsml:reuters.com:*:nL8N14R2L8

The Saudi Arabian Monetary Agency (SAMA) noticed of late "volatility in the Saudi riyal forward market against the U.S. dollar, which is based on expectations that are not correct by some of the participants in the market on the general economic situation in the Kingdom of Saudi Arabia," governor Fahad al-Mubarak said in a statement on SAMA's website.

Mubarak added SAMA's policy of linking the Saudi riyal at 3,7500 to the U.S. dollar was supported by a raft of financial policy tools including its foreign currency reserves.

(Reporting by Marwa Rashad and Reem Shamseddine in Khobar; Writing by Hadeel Al Sayegh; Editing by David French) ((Hadeel.AlSayegh@thomsonreuters.com; +971566883310;))

Keywords: SAUDI FOREX/