The origin of the currency of Bahrain is an integral part of the history of the country. It reflects not only the various stages of this story, but also the strong relations that Bahrain has established with many countries of the world. From 1959 to 1966, Bahrain, along with the rest of the Gulf states, used a rupee issued by the Reserve Bank of India at a price of 13 rupees for 1 British pound. After gaining independence in 1965, Bahrain introduced its own currency. However, the legacy of the rupee in the Persian Gulf can still be observed, as locals usually call 100 fils (1/10 dinar) rupee.
Bahrain monetary history
This state was the first in the Persian Gulf to recognize the use of coins as a means of increasing trade and financial activity. Indeed, their introduction into circulation has made a significant contribution to developing the reputation of Bahrain as a commercial center. Strategically located on one of the oldest trade routes in the world between East and West, Bahrain has become an important transit point, offering traders a reliable place to work, a supply of food and water. While its coastal waters were the source of the best pearls in the world.
Over the centuries, virtually every form of money passed through the hands of Bahrain merchants, which allowed it to claim a unique economic and political status in the region. The use of many forms of money continued until 1965, when its own currency, the Bahraini dinar, was introduced here.
The name of local money comes from the Roman word denarius. It is indicated by two characters: BD or .د.ب. Bahraini dinar is divided into smaller units - 1,000 fils. It was first used in 1965, replacing the rupee that had previously been used in the Gulf countries. The exchange was made at the rate of 1 dinar = 10 rupees. The central bank of Bahrain is solely responsible for issuing the currency in dinars and controlling its turnover. The current dinar inflation rate is around 7%.
Coin Features
Coins in denominations of 100, 50, 25, 10, 5 and 1 fils were introduced in 1965. Some of them, such as coins of 1, 5 and 10 fils, were minted from bronze, and the rest were made of copper and nickel. Later, Bahrain coins were made of brass instead of bronze and an alloy of two metals. Currently, the country uses denominations of 5, 10, 25, 50, 100 and 500 fils. Coinage of one fils coin was discontinued in 1966. Coins used today have different sizes. Five fils have a diameter of 19 mm, 10 - 21 mm, 25 - 20 mm, 50 - 22 mm, 100 - 24 mm. Their weight ranges from 2 g to 6 g.
Initially, a palm tree was depicted on all coins of Bahrain's currency, but on the new 25 fils coin there is a seal of the Dilmun civilization, which may have previously been on this island; 50 boats show a boat, and 100 shows the country's coat of arms.
One of the most striking illustrations of the symbolic importance of images in the currency of Bahrain was a coin of 500 fils: it was withdrawn from circulation in 2011, since it had an image of Pearl Square - the roundabout, which was the site of protests against the government. The ring itself was also destroyed.
Banknote History
The Monetary Council of Bahrain introduced the first notes in 1965. They had face values of 10, 5, 1, ½ and ¼ dinars. A banknote of 100 fils was introduced later in 1967. After about six years, the Bahrain Monetary Agency replaced the council. Accordingly, a new batch of banknotes in denominations of 20, 10, 5, 1 and ½ dinars was issued. This agency was renamed the Central Bank of Bahrain in 2006.
Later, in 2008, new banknotes were introduced. The central bank was determined to reflect the culture of Bahrain and its modern development with new money. On September 4, 2016, banknotes of 10 and 20 dinars with improved security functions were presented. The colors of Bahraini paper money are brown, peach, red, blue and green. In addition to the currency of Bahrain, the dinar, the country also accepts rials in Saudi Arabia. However, it should be borne in mind that the banknote of 500 riyals is an exception and is usually accepted only by large airports, electronic stores and supermarkets.
What banknotes look like:
- The banknote of the currency of Bahrain in ½ dinar is brown in color, on it are placed the images of the Court of Bahrain and the Parliament building.
- 1 dinar of red color, with Al-Khedya al-Khalifiyah school on one side and Arabian horses, “Sails and pearl” monument on the front side.
- Banknote 5 BD is blue, it shows the house of Sheikh Isa in Muharraq and the Riff fort on the front side, as well as the first oil well and an aluminum plant on the back.
- Sheikh Hamad ibn Isa Al Khalifa (King of Bahrain) is depicted on the front side of the 10 BD banknote, and in the background is the bridge of Sheikh Isa bin Salman Al Khalifa.
- Sheikh Hamad ibn Isa Al Khalifa is also depicted on a 20 BD banknote with the Islamic Center Al Fateh on the back.
Currency rate
In 1980, the Bahraini dinar was tied to the IMF special drawing rights, which in practice led to its binding to the US dollar. Consequently, the value of the dinar was tied to 1 BD and amounted to 2.65957 US dollars and 10 Saudi riyals. This exchange rate was officially recognized in Bahrain in 2001. Currently, the Central Bank of Bahrain has fixed the value of the dinar against the US dollar at the rate of 1 US dollar = 0.376 BD. As of June 23, 2017, the exchange rate of the US dollar to Bahraini dinar was 1 US dollar = 0.3774 BD. Therefore, this monetary unit remains strong, as before. Currently, the exchange rate of Bahrain to the ruble is 177.92 RUB per 1 BD. It should be noted that in recent years the situation has changed little. To date (January 2019), the exchange rate of Bahrain to the dollar is 0.38 BD per 1 USD.