In this Spotlight we’ll focus on the currency used in the UAE – the dirham. As the country grows into an increasingly large regional commercial power, the dirham becomes more important at home and abroad.
Fast Facts: UAE dirham
- UAE dirham Symbol: د.إ
- UAE Currency Code: AED
- Coins: 20, 50 fils, 1 dirham
- Banknotes: 5, 10, 20, 50, 100, 200, 500, 1000 dirhams
- UAE GDP (nominal): US$440.181 billion (28th)
- Central Bank: Central Bank of the United Arab Emirates
History: UAE Currency
Like the country itself, the dirham is relatively new – as it was introduced in 1973. Before that, most of the area was on the Qatari and Dubai riyal (which the dirham replaced on par) while Abu Dhabi used the Bahraini dinar – which was replaced at a value of 1 dirham = 0.1 dinar. Before these currencies, the Gulf rupee (issued by the Indian government) was used, along with other currencies during the long period of British rule and influence.
Notes and Coins
There have been multiple series and reissues of banknotes since the dirham’s introduction, though the 1982 series remains the most widely circulated. The denominations are differentiated by colour and feature a variety of landmarks, Emirati scenes, or traditional artifacts and emblems pertaining to the UAE. These include a traditional dagger known as a khanjar, Zayed Sports City, the UAE Central Bank, an ancient fort in Al Ain, and many others.
Coins in the UAE have their text and numerals denoted in Arabic. Though small denominations such as 1, 5, and 10 fils exist, they are rare and transactions are instead rounded up to the nearest 25 fils. Beyond the normal series of coins, occasional commemorative editions are released, often featuring rulers or famous events in the recent history of the UAE.
UAE dirham Value
While the AED has maintained an official peg to special drawing rights (FX reserves maintained by the IMF), the currency is in actuality pegged to the USD. The peg has been set at 1 USD = 3.6725 dirhams since 1997. The largest recent fluctuation occurred on November 30, 2007, when the AED rose slightly to a value of 3.6500 to 1 USD. Other than this, the rate has remained more or less constant compared to the USD, resulting in a consistent, albeit slightly anticlimactic, graph.
The value of USD.AED at the time of writing (11:35AM, June 26 2015) is 3.6730
The value of CAD.AED at the time of writing (11:35AM, June 26 2015) is 2.9715
Economy of the UAE
The UAE economy is one of the largest in the region, second only to Saudi Arabia in the Arab world. The country has managed to embark on a relative diversification beyond just oil wealth. That being said, the various emirates (minus Dubai) are still dependent on the petroleum industry, with 29% of GDP based around oil. This reliance on oil was clearly felt when Dubai required a bailout from nearby Abu Dhabi during the financial crisis.
Beyond oil, tourism is one of the most important industries in the country, especially in aforementioned Dubai. There are a large amount of luxury hotels and resorts that cater increasingly to Western visitors. Despite the more open Western business model seen in Dubai (or perhaps because of it), the emirate is currently in major debt. While the massive developments increase awareness and interest in the UAE, in many cases the city doesn’t have the capital to complete them – especially when the markets take a turn for the worse. Beyond tourism, manufacturing and construction have become increasingly important facets of the economy.
The UAE and the dirham are both relatively new, but have made an impact regionally and globally over the last couple decades. While the economy is more diverse than most in the region, it remains extremely reliant on the oil-wealth of the non-Dubai emirates, particularly Abu Dhabi.
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