Saudi riyal

Saudi riyal
ريال سعودي (Arabic)
The fifth series of the Saudi Arabian riyal
ISO 4217 code	SAR
Monetary authority	Saudi Arabian Monetary Agency
Website	www.sama.gov.sa
User(s)	Saudi Arabia
Inflation	4,1%
Source	Saudi Arabian Monetary Agency, Jan 2010 est.
Pegged with	U.S. dollar = 3,75 SR
Subunit
1/100	halala
Symbol	ر.س (Arabic), SR (Latin)
Coins	5, 10, 25, 50, 100 halala
Banknotes	1, 5, 10, 50, 100, 500 riyal

The Riyal (Arabic: ريال, ISO 4217 code: SAR) is the currency of Saudi Arabia. It is abbreviated as ر.س or SR (Saudi Riyal). It is subdivided into 100 Halalas (Arabic: هللة). The Saudi Ghirsh is 5 Halalas.

History

The riyal has been the currency of Saudi Arabia since the country came in to being and was the currency of Hejaz before Saudi Arabia was created. The Hejaz riyal was based on (though not equivalent to) the Ottoman 20 kuruş coin and was consequently divided into 20 ghirsh. However, although the Hejaz riyal was the same weight as the Ottoman 20 kuruş, it was minted in .917 fineness, compared to .830 fineness for the Ottoman coin. Thus, because the first Saudi riyal had the same specifications as the Hejaz riyal and circulated alongside Ottoman coins, it came to be worth 22 Ottoman kuruş and was consequently subdivided into 22 ghirsh when coins denominated in ghirsh were issued from 1925. This remained the system of currency even though the riyal was subsequently debased to a coin equivalent in silver content to the Indian rupee in 1935.

Note that the Latin alphabet spelling "ghirsh" rather than "qirsh" reflects the pronunciation in Saudi Arabia, while in the Arabic script the spelling was the same as used elsewhere, قرش.

In 1960, the system was changed to 20 ghirsh = 1 riyal and this was followed in 1963 by the introduction of the halala, worth one hundredth of a riyal. Some Saudi coins still bear denominations in ghirsh but this denomination is no longer commonly used.

For a wider history surrounding currency in the region, see The History of British Currency in the Middle East.

Coins

In 1925, transitional copper coins for ¼ and ½ ghirsh were minted in Mecca by `Abd al-`Azīz Āl Sa`ūd. These were followed, in 1926, by ¼, ½ and 1 ghirsh pieces minted in cupro-nickel, carrying the title "King of Hejaz and Sultan of Nejd".

In 1927, the royal title was changed to "King of Hejaz and Nejd and Dependencies" and coins were issued in denominations of ¼, ½ and 1 ghirsh in cupro-nickel and ¼, ½ and 1 riyal in silver.

In 1935, the first coins were issued in the name of Saudi Arabia. These were silver ¼, ½ and 1 riyal coins which were nearly 50% lighter than the previous issue. Cupro-nickel ¼, ½ and 1 ghirsh were also issued from 1937. In 1946 ( AH 1365), many of the cupro-nickel coins were countermarked with the Arabic numerals 65 (٦٥) in what Krause and Mishler describe as "a move to break money changers' monopoly on small coins". Cupro-nickel 2 and 4 ghirsh were introduced in 1957.

In 1963, the halala was introduced and bronze 1 halala coins were issued. This was the only year these coins were struck. Cupro-nickel 5, 10, 25 and 50 halala followed in 1972. These coins are also inscribed with their denomination in ghirsh or riyal (1, 2 ghirsh, ¼, ½ riyal). In 1976, cupro-nickel 1 riyal coins were introduced, which are also inscribed with the denomination 100 halala. Bimetallic 1 riyal coins were issued in 1999.

Fixed exchange rate

In June 1986, the riyal was officially pegged to the IMF's Special Drawing Rights (SDRs). In practice, it is fixed at 1 U.S. dollar = 3.75 riyals, which translates to approximately 1 riyal = 0.266667 dollar. This rate was made official on January 1, 2003.

The riyal briefly rose to a 20-year high after the Federal Reserve cut interest rates on September 18, 2007 and the Saudi Arabian Monetary Agency chose not to follow suit, partially due to concerns about the inflationary effects low interest rates and a lower value for the riyal. The riyal returned to its peg against the U.S. dollar in early December of 2007.

Current SAR exchange rates
From Google Finance:	AUD CAD CHF EUR GBP HKD JPY USD CNY
From Yahoo! Finance:	AUD CAD CHF EUR GBP HKD JPY USD CNY
From XE.com:	AUD CAD CHF EUR GBP HKD JPY USD CNY
From OANDA.com:	AUD CAD CHF EUR GBP HKD JPY USD CNY
From fxtop.com:	AUD CAD CHF EUR GBP HKD JPY USD CNY

Note: Rates obtained from these websites may contradict with pegged rate mentioned above

Monetary Union

Saudi Arabia is a member of the Cooperation Council for the Arab States of the Gulf, which plans a monetary union with a single currency by 2010.