United Arab Emirates dirham

History

The name Dirham derives from the Greek word Drachmae, literally meaning "handful", through Latin. Due to centuries of old trade and usage of the currency, dirham survived through the Ottoman Empire.

The United Arab Emirates dirham was introduced on 19 May 1973. It replaced the Qatar and Dubai riyal at par. The Qatar and Dubai riyal had circulated since 1966 in all of the emirates except Abu Dhabi, where the dirham replaced the Bahraini dinar at 1 dirham = 0.1 dinar. Before 1966, all the emirates that were to form the UAE used the Gulf rupee. As in Qatar, the emirates briefly adopted the Saudi riyal during the transition from the Gulf rupee to the Qatar and Dubai riyal.

Coins

In 1973, coins were introduced in denominations of 1, 5, 10, 25, 50 fils, and 1 dirham. The 1, 5 and 10 fils are struck in bronze, with the higher denominations in cupro-nickel. The fils coins were same size and composition as the corresponding Qatar and Dubai dirham coins. In 1995, the 50 fils and 1 dirham coins were reduced in size, with the new 50 fils being curve-equilateral-heptagonal shaped.

The value and numbers on the coins are written in Eastern Arabic numerals and the text is in Arabic. The 1, 5 and 10 fils coins are rarely used in everyday life, so all amounts are rounded up or down to the nearest multiples of 25 fils. The 1 fil coin is a rarity and does not circulate significantly. In making change there is a risk of confusing the old 50 fils coin for the modern 1 dirham coin because the coins are almost the same size.

Since 1976 the Currency Board of the United Arab Emirates has minted several commemorative coins celebrating different events and rulers of the United Arab Emirates. For details, see Commemorative coins of the United Arab Emirates dirham.

Issues with fraud

By August 2006 it became publicly known that the Philippine one peso coin is the same size as one dirham. As 1 peso is only worth 8 fils, this has led to vending machine fraud in the UAE. Pakistan's 5 rupee coin, the Omani 50 Baisa coin and the Moroccan 1 dirham are also the same size as the U.A.E. one dirham coin. A falcon watermark is present on all dirham notes to prevent fraud.

Exchange rates

On January 28, 1978, the dirham was officially pegged to the IMF's special drawing rights (SDRs). In practice, it is pegged to the U.S. dollar for most of the time. Since November 1997, the dirham has been pegged to the 1 U.S. dollar = 3.6725 dirhams, which translates to approximately 1 dirham = 0.272294 dollar.

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