Home   |    About Us   |   Feedback   |   Services Offered   |   Do's & Don'ts   |   Prices   |   Register   |   Contact Us   |   Sitemap  | Faq
 
 

  Relation between Percentage Shares above Support and Delivery  
  Name change of company  
  Daily Trend Of Index  
  Intraday Trend of Index  
  Intraday Nifty System  
  Results of Intraday Trend  
  Results of Daily Trend  
Trend of other markets of the world  
Technical Analysis of 20 Active Stocks  
Analysis of Indian Stock Market Future Stocks  
 Free Newsletter  

Technical Terms

 
Intraday Trading chat  Room Samples  
  Newsletters  
  Trend of stocks & their 200 DMA  
  Weekly Moving Average (NSE)  
  Weekly Moving Average (BSE)  
Commodities  
 
Currencies
UNITED ARAB EMIRATES DIRHAM
Introduction | Overview | Structure | History | Factors affecting change in exchange rates | Daily trend of UAE dirham | Weekly trend of UAE Dirham
Introduction


Dirham is the name of the official currencies of the countries United Arab Emirates and Morocco. It also serves as the subunit of the currencies Qatar riyal (equal to 1/100 of riyal), Libyan dinar (equal 1/1000 of dinar), and Jordanian dinar (equal to 1/10 of dinar). As the currency of United Arab Emirates, dirham is called Emirati dirham that is denoted with the symbol "د.إ" in the Arabic language that translates A.D and is also denoted as "DH or Dhs" in the unofficial abbreviated form. The Emirati dirham is divided into 100 parts of the subunit known as "fils".

According to the ISO 4217 standard, the currency code for the United Arab Emirates dirham is AED and the numeric code for it is 784. The currency is in operation since 1973 when it was introduced for the first time replacing the Qatar and Dubai riyal.

Overview


Dirham had been a very important currency in the Islamic world and in the Middle East as it has been a prime medium of exchange since ages. The word dirham was taken up from the word "dirhem" that came from "drachm", the name of an ancient Greek coin. UAE was once considered a poor desert area as there is no scope for agriculture there but now it has transformed into a modern country having a real high standard of living that is ranked 35 out of 232 countries courtesy its oil wealth. The oil exports contribute over one third of the Gross Domestic Product of the country and that is why the prices of the oil access control over the growth and performance of the country.

The UAE dirham keeps constant with the value of the United States dollar, the exchange rate between the two being 1 US dollar = 3.67 UAE dirham, not fluctuating much over a long span of time. Off lately, this linkage with the US dollar is not proving much advantageous, as the recent depreciation of dollar has negatively affected purchasing power parity of UAE dirham against other currencies. Regarding the restrictions on the export and import of currency in the country, a declaration is needed for the amounts exceeding AED 40000 and equivalent amounts.

Structure

The Emirati dirham has "fils" as its subunit dividing 1 unit of the currency into 100 equal subunits. For small denominations of the currency i.e. below 1 dirham, coins are issued and for the denominations above 1 dirham, bank notes of the currency are issued. Central Bank of United Arab Emirates possesses the authority of issuing the currency in the country as the central bank. The dirham coins are available in 6 face values of 1, 5, 10, 25, 50 fils and 1 dirham. The value and number of the coins is engraved in Eastern Arabic numerals and the text in Arabic language. 1, 5 and 10 fils coins are rare in the current scenario and that is why most of the prices are rounded up in the multiples of 25. With the 1 Philippine peso coin having the same size but only around 7% in value as compared to 1 Emirati dirham coin, there had been problems of fraud in the country. Also, the central bank had been minting various commemorative coins since 1976.

Regarding banknotes, they are issued in 8 denominations namely 5, 10, 20, 50, 100, 200, 500 and 1000 dirhams. The text on the front side of the dirham note is printed in Arabic and the values in the Eastern Arabic numerals. On the backside of the notes, the numerals are printed in Hindu Arabic numerals and the text in English. 200 dirham notes have not been printed since 1989 but are still in circulation.

History


UAE was formed in the year 1972 when the six states namely Dubai, Sharjah, Fujairah, Ajman, Abu Dhabi and Umm-al-Qaiwain merged to form this single country. Prior to this, the states didnít have their own currency and the use of other foreign currencies prevailed especially Indian rupee. Rupee was used as a principal currency for exchange till 1959 when the Reserve Bank of India issued the Persian gulf rupee to be used by the gulf countries instead of the Indian rupee. The Bahraini dinar was introduced in 1966 that replaced the gulf rupee @ 1 Bahraini dinar = 10 Persian Gulf rupee in the Trucial states except 1 state i.e. Abu Dhabi, which adopted the use of the Qatar-Dubai riyal.

With the formation of the United Arab Emirates, the UAE dirham was made the official currency of the country. It was circulated in place of Bahraini dinar @ 10 UAE dirham = 1 Bahraini dinar and in place of Qatar-Dubai riyal at par. Initially the currency was issued by the United Arab Emirates currency board but since the 1982 the authority of issuing the currency is in the hands of the United Arab central bank. Dirham is mostly pegged with the US dollar and the exchange rate between them i.e. 1 US dollar = 3.67 UAE dirham has not varied much since the 1980s.

Factors affecting the exchange rates between two countries


The volatility in the foreign exchange rates depends upon a numerous macro economic factors that have different degrees of importance to different economies of the world. Some special and exceptional factors affecting the rates may also exist in the case of different countries. Following are shown the common factors on which the foreign exchange rate depends

  • Flow of imports and exports between the countries
  • Flow of capital between the countries
  • Relative inflation rates
  • Fluctuation limits on exchange rate imposed by the governments of the countries
  • Merchandise trade balance
  • Rate of inflation in the country
  • Flow of funds between the countries for the payment of stock and bond purchases
  • Relative growth
  • Short term and long term interest rate differentials
  • Cost of borrowings
 
   Disclaimer | Privacy Statement

Copyright crnindia.com, All rights reserved world wide