The United Arab Emirates Money is officially known as the Dirham (AED), the sole legal tender of this thriving Middle Eastern nation. Introduced on May 19, 1973, the dirham replaced the Qatar riyal, marking a significant step in the UAE’s economic independence. Each dirham is subdivided into 100 fils, facilitating everyday transactions and reflecting the country’s robust financial system.
The Dirham’s Historical Journey
The story of United Arab Emirates money begins in 1973, but its roots trace back to the currencies that preceded it. Before the dirham, the Qatar riyal was used across most Emirates since 1966, except for Abu Dhabi. This transition period saw both Qatar and Dubai adopting the riyal, bridging the gap from the Indian rupee, which was previously prevalent in the region.
In the same year the dirham was launched, the UAE minted its first coins. These included denominations of 1, 5, 10, 25, 50 fils, and 1 dirham. The smaller denominations (1, 5, and 10 fils) were made from bronze, while the rest were crafted from cupronickel. Interestingly, these fils coins mirrored the size and composition of their Qatar riyal counterparts, ensuring a smooth transition for the public. A notable change occurred in 1995 when the size of the 1, 5, and 10 fils coins, along with the 1 dirham coin, was reduced. The new 1 dirham coin was designed with the same diameter as the older 50 fils coin. Furthermore, the 50 fils coin was also made smaller and given a distinctive heptagonal shape, making it easily recognizable in daily use.
The introduction of banknotes for United Arab Emirates money also occurred in stages. The first series appeared in 1973, followed by a second series in 1982 which replaced the 1 and 1,000 dirham denominations. The 500 dirham note was introduced in 1983, expanding the range of values available. Later, in 1989, the 200 dirham banknote was added, and the 1,000 dirham note was reintroduced in 2000, completing the current suite of banknotes.
In terms of international exchange rates, the UAE dirham’s value has been closely linked to major global currencies. Initially, on January 28, 1978, the dirham was pegged to the International Monetary Fund’s special drawing rights. However, in practice, it is firmly pegged to the US dollar, providing stability and predictability in international trade and finance.
Current Banknotes and Coins of the UAE Dirham
The Central Bank of the United Arab Emirates holds the responsibility for managing the United Arab Emirates money supply. This includes both minting the coins and issuing the banknotes that are used throughout the country.
Today, the coins in circulation for United Arab Emirates money include denominations of 1, 5, 10, 25, and 50 fils, as well as the 1 dirham coin. These coins are essential for smaller transactions and are commonly used in everyday purchases.
As for banknotes, the denominations currently in use are 5, 10, 20, 50, 100, 200, 500, and 1,000 dirhams. This wide range of banknotes facilitates transactions of varying values, from everyday shopping to larger financial dealings within the UAE.
Interesting Facts About the Dirham
The name “Dirham” itself has fascinating origins, derived from the Greek word “drachmae,” which literally translates to “handful.” This linguistic connection highlights the historical trade routes and currency usage that persisted through the Ottoman Empire, ultimately leading to the adoption of “dirham” in the UAE.
An interesting, albeit problematic, fact emerged in August 2006 when it was discovered that the Philippine 1 peso coin had the same size as the 1 dirham coin. This similarity unfortunately led to vending machine fraud in the UAE. Similar issues arose with other currencies, including the Pakistani 5 rupee coin, the Omani 50 Baisa coin, and the Moroccan 1 dirham coin, all of which share the same size as the 1 dirham coin, causing confusion and potential for misuse in automated systems.
Since 1976, the Central Bank of the United Arab Emirates has also been actively involved in minting commemorative coins. These special edition coins celebrate various significant events and honor the rulers of the United Arab Emirates, adding a cultural and historical dimension to the United Arab Emirates money.
