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Currencies |
| OMANI RIAL |
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| Introduction
| Overview | Structure
| History | Factors
affecting change in exchange rates | Daily
trend of Omani rial | Weekly
trend of Omani rial |
| Introduction |
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Rial or riyal refers to the Arabic currency unit that serves as an
official currency to most of the countries belonging in the
Arabian Peninsula. Iranian rial, Saudi riyal, Omani rial, Qatari
riyal and Yemeni rial are examples of rial denominated currencies.
Rial stands among the most highly valued currency being one of
rial denominated currency i.e. Omani rial placing itself among the
top five highest valued currencies in the world.
Omani rial has been serving as the national
currency of the sultanate of Oman since the year 1973. "Baiza"
divides the currency into 1000 equal parts. In Arabic language,
Omani rial is written as "ريال"
and denoted with the symbol "ر.ع".
According to the ISO 4217 regulation, the currency code for it is
OMR and the numeric code for the currency is 512.
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Overview
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Like most of the other countries in the Middle East, the economy
of Oman is largely characterized by large oil and gas resources.
It stands among the best economies in the Arabia though smaller in
size comparatively. The low inflation rate in the country helps
the economy to sustain stability and it helps the government in
its attempts to attain self-dependency. Further, the economical
stability makes the currency of Oman a safe investment. Omani rial
is one of the highest valued currencies of the world ranking 4th
after Kuwaiti dinar, Maltese lira and Bahraini dinar. Like Kuwaiti
dinar, Omani rial is also counted among one of the few currencies
that are broken up into 1000 equal parts by their subunits.
The currency of the country had been pegged
to the US dollar from the very start. The rial-dollar exchange
rate was fixed from 1973 to 1986 @ 1 rial = 2.895 dollars but in
1986, slight adjustments were made. The Omani rial was devalued
and a new fixed exchange rate was set up i.e. 1 rial = 2.6008
dollars that continues even today. The import and export of the
local currency as well as foreign currencies is free, the
exception being the Israeli shekel that is banned in the country.
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Structure
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Omani rial is one of the very few currencies in
the world that are divisible in 1000 equal parts
by its subunit i.e. "baiza", most of
them divisible in 100 subunit parts. Oman
adopted rial as its national currency in the
recent past and hence; it is one of newer
currencies. Banknotes dominate the currency as a
wide range of face values are issued in the form
of banknotes and fewer denominations are issued
as coins. Coinage is issued in just 4
denominations that are 5, 10, 25 and 50 baisa.
Since rial has been adopted as the national
currency of the country, the pattern and design
of the coinage in the currency remains
unchanged. The obverse of all the coins is
embossed with the national emblem of Oman, two
crossed swords super imposing a khanjar dagger
in its sheath. The reverse side of the coin
depicts the value of the coin written in Arabic
numerals.
The paper currency form of
Omani rial has got 8 denominations printed for
circulation namely 100, 200 baisa, ½, 1 rial,
5, 10, 20 and 50 rials. Omani rial banknotes
have always been popular as compared to the
banknotes of other currencies prevailing in
Arabian Peninsula. The pattern of banknotes too,
didn’t have to face drastic changes since the
currency had been introduced and they look
pretty much the same. The current series notes
that are still accepted as legal tender were
issued in 1995 and 2000. The notes in
circulation can be categorized in 2 types on the
basis of their designs; 1st type consisting of
banknotes having values lower than and equal to
1 rial and the 2nd type consisting of notes
higher than 1 rial. The design differs for both
the types and the latter category of notes was
even re-issued in the year 2000. On the right
hand side of the front of each note is shown a
portrait image of Sultan Qaboos bin Said. Each
note possess images of different forts and
landscapes on each side, details being mentioned
below
The function of the reserve
bank is performed by the Central Bank of Oman,
which was established in 1974.
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| History |
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Before the sultanate of Oman gained independence in
1970, it did not have its own currency. Muscat and
Oman were different independent states at that time
and a cluster of currencies circulated in there
including most importantly rupees and thalers and also
dollars, pounds, dinars, annas etc. This was due to
the dominating location of the states in context of
ancient sea trade routes that so many currencies were
present at one place. Maria Theresa Thaler usually
circulated on the center areas and the Indian rupee on
the outskirts of the states. These currencies were
subdivided by "baiza" and it was lowest
denomination coin at that time. In 1959, Indian Gulf
rupee (XPGR) was launched and the Indian rupee
circulating in the gulf countries got replaced with it
at par.
With the establishment of the new
state, a new national currency named Rial Saidi (OMS)
was issued that took gulf rupee’s place @ 1 saidi =
21 gulf rupees. The value of rial saidi was almost
equal to the British pounds and the function of
printing of banknotes was in the hands the states of
Muscat and Oman. In 1972, another new currency with
the name Rial Omani replaced the previous one at par,
the reason for it being the accession of sultan Qaboos
bin Said. In 1973, Oman currency board was formed and
it was entitled with the function of issuing currency
for the state. But still, it was not provided with all
the functions and authority a central bank possess.
The Central Bank of Oman was created in 1974, taking
over the place of the currency board.
Since 1970, five banknote series
have been issued, the fifth still in circulation. The
first series was issued in 1970 in "rial saidi"
units by Muscat Currency Authority in 6 denominations.
These notes were withdrawn in November 1976. The
second bank note series was issued in 1972 with a
changed currency unit from the previous series i.e. in
Rial Omani under the reign of Sultan Qaboos bin Said.
Oman Currency Board issued the banknotes for the first
time, denominations being the same as the first
series. This series was taken off completely from the
market in 1979. The establishment of the central bank
called for the need for the issue of the third bank
note series in 7 denominations (2 supplementary issues
also in 1982 and 1985 respectively) in 1976. All this
while, Bradbury Wilkinson & Co. had been printing
the banknotes for the country. The fourth issue of the
banknotes was done from 1985 up till 1994; services
from a different printing company named Thomas de la
Rue were taken this time. The series consisted of 9
denominations and had new and improved technological
features. The fifth banknote series was issued in 1995
and is still in circulation, revision being done in
the year 2000.
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| Factors
affecting the exchange rates between two countries
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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
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