Aug 23 (Reuters) - U.S. dollar/Saudi riyal forwards were quoted higher on Sunday after credit ratings agency Fitch cut its outlook for Saudi Arabia, citing lower oil prices and higher state spending associated with the accession of a new king in January.

One-year dollar/riyal forwards were quoted at 340 points, their highest level since March 2003 and up from a previous close of 310 points, as some banks used the market to hedge against the risk of riyal depreciation.

(Reporting by Andrew Torchia; Editing by Susan Fenton)