Dubai: You have them in your pockets and take them wherever you go. But do you know what they’re worth apart from their face value?
The dirhams in your wallet tell more than how much purchasing power you have now. They provide a doorway to the past, back when the UAE was not yet a country and the emirates were still called Trucial States.
This 46th National Day of the UAE, Ram Kumar, founder of Numisbing, a Dubai-based dealer of collectible coins, banknotes, medals and bullion, takes us through the journey of how the dirham came to be and what the means of exchange in this century were before the birth of the country.
“Before the UAE was formed in 1971, all the five emirates had their own commemorative coins [showing famous events around the world] except Dubai and Abu Dhabi. These things ran until 1966,” Ram Kumar told Gulf News as he scanned a panel full of commemorative coins dedicated to the UAE at Numisbing.
The use of coins in the region dates as far back as the 4th century BC, excavations across the UAE show. People from this part of the world used Greek coins, the drachma, to trade. This was followed by Islamic coins, then the colonial currency, the Indian rupee.
“Until oil was discovered, the UAE was a desert. That’s why they could not issue their own currency. Secondly, there was no country,” Ram Kumar, a professional numismatist, said.
Back then, when the seven emirates were still Trucial States under UK protection, Indian coins and rupees were circulated in the region as the mode of exchange.
“India, being a British colony, was a big hub then and its notes were issued and circulated not only in the Middle East but in Africa as well. This continued until the discovery of oil.”
But the gold smuggling problem led the Indian government to issue Gulf rupees in 1957 to be used in the region. The note looked the same as the Indian rupee but with a different colour. The exchange rate was also the same.
With the discovery of oil, all Gulf countries decided to drop the Indian currency gradually.
“Each emirate decided to use the currency of their nearby countries. Abu Dhabi decided to use the Bahrain riyal; Sharjah was using Saudi riyal; Dubai and Qatar joined together and formed a currency for themselves.”
The maximum note at that time was 100 riyals equivalent to around the average salary in today’s time of Dh5,000, Ram Kumar said.
In 1971, the six emirates unified to become the United Arab Emirates. Ras Al Khaimah joined the union the following year. The UAE dirham as a currency we know today was issued in May 1973, two years after the unification.
“If you are individual states, the power of the states is much lesser. When you join the states together and form a country, then power becomes massive. That’s what the UAE did in 1971 and we all are enjoying the fruit now.”
The first dirham banknotes were issued by the Currency Board in denominations of 1, 5, 10, 50, and 100. The 1,000 denomination came three years later.
The front face showed the same UAE geographical boundaries and some local environment backgrounds. The back showed different places in each of the emirate such as the palace of the ruler of Ajman, an aerial view of Umm Al Quwain, an old fort in Fujairah, and two old forts in Dubai and Abu Dhabi, among others.
When the UAE Central Bank was formed, it issued new banknotes and discontinued the first issues by 1982. Just like in the first round of printing the dirhams, there was no Dh1,000 bill then. The highest bank note was Dh500. Sixteen years later, the Dh1,000 bill was issued.
No major aesthetic changes have been made to the new currencies since 1982. Each had a watermark of a falcon and different historical landmarks from each emirate that tells how the emirates have evolved into what they are now.
“Currencies and coins are a way of communicating to people. In ancient past, the common man wouldn’t know who the ruler was because the kingdom was huge. They would only know him by the coin which bore his image,” he said.
“Notes are something, which everyone has. It’s in your pocket. Whoever has come to the UAE in the past 15 to 20 years are seeing only the buildings and the developed UAE. So this is the easiest way to explain it. You don’t need to have antique photographs. You don’t need to go to a museum to find out how it was. The currencies show history.”
The UAE has never demonetised any of its banknotes or coins. All of them, even if you have the old Dh1 coin, are still considered legal tender.
Every dirham note has a falcon and a year when it was printed.
The banknotes are different in sizes so you won’t mix them in a bundle. Also, the printing cost of a Dh5 note is lesser than a Dh1,000 note, hence the difference in size.
The UAE issued a Dh5 coin for the first time in 1975.
The Dh1 made of copper nickel used to be bigger and heavier at 11.4 grams compared to the current 6.1-gram dirham coin.
The Dh1,000 note has the maximum security features.
The Dh1 coins usually have the coffee pot image at the back. But you may also, on rare occasions, find commemorative coins with different images like those of the Chamber of Commerce, Global Village and others.