Before the establishment of the United Arab Emirates in 1971, the region underwent several changes in its currency system. The journey of UAE’s old currency reflects the nation’s historical economic transitions and its path towards financial stability. From the usage of foreign currencies to the introduction of the UAE dirham, the monetary history of the UAE is a fascinating subject that showcases the nation’s growth.
Pre-UAE Era: Currencies in Use
1. Indian Rupee (Before 1959)
Before the 1960s, the Trucial States (now the UAE) widely used the Indian rupee for trade and daily transactions due to strong economic ties with India. The rupee was a trusted currency in the region due to its stability and widespread acceptance.
2. Gulf Rupee (1959-1966)
In 1959, India introduced a special currency, the Gulf rupee, exclusively for use in the Gulf states, including the Trucial States. The Gulf rupee was equivalent in value to the Indian rupee but prevented the outflow of foreign exchange from India’s economy.
3. Saudi Riyal (1966)
Following the devaluation of the Indian rupee in 1966, the Trucial States abandoned the Gulf rupee. To avoid economic instability, the region temporarily adopted the Saudi riyal until a more permanent currency solution was found.
4. Bahraini Dinar and Qatari/Dubai Riyal (1966-1973)
From 1966 onwards, the Bahraini dinar was introduced in Abu Dhabi, while the other emirates began using the Qatari/Dubai riyal. These currencies remained in circulation until the UAE introduced its own national currency.
Introduction of the UAE Dirham (1973)
Two years after the formation of the UAE, the country introduced its national currency, the UAE dirham (AED), on May 19, 1973. The dirham replaced all previously used currencies and became the official legal tender across the country. The first banknotes issued included denominations of 1, 5, 10, 50, and 100 dirhams, followed later by a 1000-dirham note.
Features of Old UAE Banknotes
The first series of UAE dirham banknotes featured:
- Arabic calligraphy and traditional designs reflecting Emirati culture.
- Watermarks and security features for authenticity.
- Images of historical landmarks, such as forts and mosques.
Rare and Collectible UAE Banknotes
Over the years, early UAE banknotes have become collector’s items, with rare editions and misprints fetching high values in numismatic markets. The first-generation banknotes, especially those in pristine condition, are highly sought after by collectors worldwide.
Conclusion
The evolution of the UAE’s currency reflects the nation’s economic transformation from a collection of small emirates relying on foreign currencies to a unified country with a strong national economy. Today, the UAE dirham remains a stable and widely respected currency, symbolizing the country’s financial strength and prosperity.
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