The Saudi Riyal is the name given to the official currency of Saudi Arabia. The Riyal has been the currency for the country since before the name Saudi Arabia existed. The Riyal was also used as the currency for The Kingdom of Hejaz from 1916-1925. The Riyal is currently pegged to the US Dollar at a rate of 1 USD = 3.75 SR.
Economy
Saudi Arabia’s economy is highly dependent on the petroleum industry, with ~45% of GDP and 90% of exports derived from the oil sector. It is estimated that Saudi Arabia controls roughly 20% of the world’s total oil reserves.
The current Saudi government is attempting to reduce its dependence on oil and stimulate growth in other industries by privatizing several key public functions — telecommunications and electricity.
The Saudi stock market index, known as the Tadawul , is the largest stock market in the Middle East.
Saudi Arabia is one of the fastest growing countries in the world. Per capita income is expected to rise from ~USD$15,000 in 2006 to >$33,000 in 2020, due in part, to the establishment of six new “economic cities.
History
The Riyal has been the currency of Saudi Arabia since before its name change (from Kingdom of Hejaz) in 1925. Its original value was tied to the Ottoman 20 kuruş, but used the term ghirsh (or qirsh or قرش in Arabic).
In 1925, coins were introduced for ¼, ½ and 1 ghirsh. ¼, ½ and 1 riyal coins followed shortly thereafter, and were introduced in 1927. These coins were still identified as the currency of the Kingdom of Hejaz.
The first coins issued as the currency of Saudi Arabia were introduced in 1935. These coins replaced the ¼, ½, and 1 riyal Kingdom of Hejaz coins.
In 1937, the ¼, 1/2, and 1 ghirsh Hejaz coins were also replaced by Saudi Arabian equivalents, and in 1946, 2 and 4 ghirsh coins were introduced.
The first “banknotes” were introduced in 1953 by the Saudi Arabian Monetary Authority (SAMA). Haj Pilgrim Receipts were actually receipts that were intended to be used in pilgrim foreign exchange transactions, but eventually became widely used for larger transactions.
In 1961, SAMA replaced Haj Pilgrim Receipts with regular banknotes in values of 1, 5, 10, 50, and 100 riyal. Pilgrim Receipts were officially phased out in 1964.
In 1963, the ghirsh was replaced by a new sub-division, the halala, with 1 halala = 1/100th of a riyal. At introduction, a 1 halala coin was issued, but 5, 10, 25, and 50 halala coins followed in 1972. The ghirsh is no longer commonly used in Saudi Arabia.
In 1986, the Riyal was pegged to the IMF’s Special Drawing Rights. In 2003, the Riyal was officially pegged to the US Dollar at 1 Riyal = 3.75 USD.
