What is Riyal of Saudi Arabia?
Saudi Riyal is Saudi Arabia’s currency. It is commonly known as SAR. It is further subdivided into 100 subunits which are known as Halala. It is the monetary unit that is mainly used in Saudi Arabia.
It was one of the primary currencies of the Mediterranean during the Ottoman era. Hejaz was the first holder of this currency even before the existence of Saudi Arabia. Hejaz riyal was equivalent to 20 kuru’s coin, so when Saudi Riyal came into existence, it was similar to Hejaz riyal and hence was also equivalent to 20 kuru’s coin.
Saudi Riyal was also equivalent to 22 Girish initially, but with time, this was changed to 20 Girish. In 1963, the introduction of halala changed currency comparison, and other comparisons such as Girish were no longer used.
The new country used several foreign precious metals coins like the Austrian silver thaler (Sovereign of Britain). This taler was locally named “Ariyal Alfransi,” which means the first Silver Saudi Arabian Riyal (SAR) was minted in 1935 in French Riyal. The Riyal half and Riyal quarter were also released in the same year.
Establishment of SAMA (Saudi Arabian Monetary Authority):
Due to the absence of a banking system, there was so much confusion worldwide, so king Abdul Aziz started this mission of forming a stable setup to finish this unrest and chaos. So, SAMA came into being in 1952 and played an important role in stabilization of Saudi currency.
In 1952, a stabilizing value was set up by the Saudi Arabian Monetary Authority (SAMA). King Abdul-Aziz realized that heavy riyals were not a practical approach. At the same time, fast economic development more he noticed Hajj Pilgrims were striving to transport the heavy silver Riyals as people have to offer prayers as well as look after and carry these heavy riyals with them, which was practically hectic to handle.
When the country and economy became more stable, five million receipts were printed in different languages such as Urdu, Turkish, English, Persian, Malayan and Arabic. The value of this receipt was 10 riyals. Moreover, people all over appreciated this step and boosted government confidence in moving forward towards paper money instead of heavy riyals. SAMA initially issued paper money for 10 Silver Royals and then called Pilgrim Receptions.
SAMA substituted daily banknotes for Haj Pilgrim receipts in 1961 with 1, 5-, 10-, 50- and 100-riyal values. In 1964 the receipts of pilgrims were formally terminated. In 1963, a new division, the halala, replaced the girsh with one halala = one-hundredth of a riyal. In the beginning, a one halala coin was made, but in 1972 were also set up 5, 10, 25 and 50 halala coins. The girsh in Saudi Arabia is no longer common. The Riyal was bound by the special drawing laws of the IMF in 1986. The conversion rate has been attached to the US Dollar since 2003. The Riyal was formerly attached to 1 Riyal to the UNITED STATES DOLLARS in 2003 = US$3.75.
Qatar also issued its currency, also known as Riyal but most accurately “Qatari Riyal”, after it got independent in the 1970s. Qatari Riyal is split up into 100 more dirhams.