Banking & Commerce

Evolution of Qatar Currency

Early man managed several thousand years of bargaining and bartering without money, and with the ever-increasing use of electronic transactions today, whether the next couple of hundred years will see its final demise is open to debate. Coins and banknotes have provided not only the structure of modern society, but also a record of its history. The advent of stamps added another strand to the record of Qatar’s progress with the commemoration of major events, culture and flora and fauna.

Coins and Notes

Qatar is the inheritor of a long tradition of Islamic coins, which started with silver dirhams struck in the reign of the third Khalif (Islamic ruler) named Uthman (reigned 644 – 656 CE). The name is still used for the coins of Qatar. Coins used the bimetallic standard (established under the second Khalif named Omar) that confirmed each pure silver dirham should weigh 3g and that 10 dirhams were equivalent to the other officially sanctioned coin, the gold dinar. This weighed 4.25g of 22k gold. These two coins remained the currency of daily life for many Muslims for almost 1,500 years.

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Picture of a dhow and sand dunes is a detail from the QR10 banknote now in circulation.

The secondary value of these and later coins lies in their distribution, which confirms the widespread interaction between peoples and cultures, and confirms the extraordinary extent of trade during the following centuries. It also says much for the consistent purity of the coins that they were so readily accepted, a fact confirmed by King Offa of Mercia who, in late 8th century Anglo-Saxon England, minted both gold and silver coins to Islamic standards with ‘Mohammed the Messenger of God’ on the reverse. The rare cache of 472 Arab silver coins found in Sweden in 2008 (buried there around 840 CE) reflects the trade between the Vikings and Arabs further south in Russia and the Baltic States.

The introduction of paper money into the Islamic world came after it was invented in China. The Mongol ruler Gaykhatu introduced paper money into Islamic trading circles during the late 13th century in his conquered territories of present day Iran, Iraq and Afghanistan, but the merchants refused to accept it and with trade at a virtual standstill he abandoned the project after six months. Money in this form did not return to the Middle East until the 19th century when the Ottoman Khalifate in Turkey issued the first printed bank notes in 1842.

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The dirham coins currently in use in Qatar are minted in 5 face values: one, five, 10, 25 and 50 dirhams.

Paper money has always posed problems for devout Muslims since it represents the promise of a payment as a medium of exchange, which is forbidden by Sharia (Islamic law). The payment of zakat, setting aside a proportion of one’s wealth for the needy and one of the five tenets of Islam, was always made in dinars and dirhams until the fall of the Khalifate, even though paper money was available. Recent efforts (primarily by Malaysia) to interest the Organisation of The Islamic Conference (OIC), a grouping of 57 Islamic states, in a return to the value of a gold dinar and silver dirham as a medium of exchange have met with little success.

The currency of Qatar today is the Qatari Riyal divided into 100 equal parts known as dirhams. Riyals are issued as bank notes in denominations of one, five, 10, 100, and 500 riyals and dirhams are issued as coins of one, five, 10, 25 and 50 dirhams.

Qatar first issued its own currency in 1973 and the currencies in use prior to that date reflect the changing historical fortunes of the country. Qatar formed a new state in 1868 after detaching itself from Bahrain and in 1916 the country became a British protectorate. Until 1950 Qatar used a mixture of currencies including British sovereign gold coins, the silver Saudi Riyal issued in 1927 and Maria Theresa silver thalers (widely circulating in the Arabian Peninsula) as well as the Indian Rupee and money from Oman and Persia.

1950 – 1959 The Indian Rupee

This currency enjoyed legal tender status in Qatar and all the Arabian Gulf states in accordance with a tripartite agreement between themselves, India and Britain, after Britain withdrew from India in 1947 (which had been its main administrative centre for the Gulf).

1959 – 1966 The Gulf Rupee

Issued by the Indian government, these banknotes carried the same colours and designs as the Indian Rupee but bore the letter ‘z’ before the serial number. The devaluation of the Indian rupee by 30% on the part of the Indian Government in June 1966 also affected the Gulf Rupee, and the Gulf States moved quickly to withdraw and replace the currency.

June – September, 1966 The Saudi Riyal

As an interim solution Qatar and Dubai borrowed one hundred million Saudi Arabian Riyals for use until mid-September, when sufficient new notes were released by the printer.

1966 – 1973 Qatar and Dubai Riyal

The issue of these notes saw the immediate withdrawal of the Saudi Riyal from circulation and they continued in use until 1973 when Dubai joined the UAE and Qatar issued its own currency, the Qatari Riyal.

1973 – to date The Qatari Riyal

This was first issued on 19th May 1973, in denominations of one, five, 10, 100 and 500 riyals (a 50 riyal note was added in 1976). The front side is in Arabic and the reverse in English. There have been three more issues to date and the GCC states future monetary union will see the issue of a common currency.

The basic characteristics of Qatari banknotes combine Arabic and English text, Islamic pattern and design, and the incorporation of national landmarks and symbols.


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