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Currencies |
| QATARI RIYAL |
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| Introduction
| Overview | Structure
| History | Factors
affecting change in exchange rates | Daily
trend of Qatari riyal | Weekly
trend of Qatari riyal |
| Introduction |
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Like a number of gulf countries including Iran, Oman, Yemen and
Saudi Arabia, Qatar uses riyal as its official currency unit and
is called Qatari riyal. As per the ISO 4217 standard, the currency
code for the Qatari riyal is QAR and the numeric code given to it
is 634. The country adopted riyal as its national currency in 1973
when it took over Qatar and Dubai riyal at par. In daily use, the
currency is depicted as QR in the English language and as "ر.ق"
in Arabic language. The subunit of the currency i.e. "dirham"
divides one unit of riyal into 100 equal parts.
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Overview
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Qatar is ranked among the major oil producing countries in the
world. The economy of the country is largely dependent on oil
revenues for its functioning that accounts to a huge 85% of the
total income of the country. In a true sense, oil serves as the
backbone of the economy of Qatar. Also, in context of natural gas
exports, the country claims the 3rd place. Moreover, Qatar stands
35th among 173 countries in the current Country Credit ratings
published by the magazine "Institutional Investor". The
currency of the country provides good support for the foreign
trade that has flourished over a period of time. As Qatari riyal
is pegged to the US dollar on a fixed regime basis @ 1 US dollar =
3.64 Qatari riyals, it provides a stable platform for the economy
to operate without much fluctuations in the value. The peg has
been made since 1980 although prior to it, the currency was pegged
to IMF’s Special Drawing Rights.
The major threat that Qatar still encounters
is that its oil and natural gas reserves are estimated to come to
an end in around 2030. Also, the sharp rise in country’s
liabilities has been a point of concern from a last few years
though some experts believe that it is relatively favorable for
the country. The imports and exports of all the currencies is free
in Qatar. The banknotes issued before 1999 had been withdrawn from
circulation and were redeemable till the year 2005.
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Structure
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Qatar riyal breaks up into 100 equal parts and
the subunit for it is served by dirham. It is
often confused with the national currency of
United Arab Emirates that is also known as
dirham but the difference lies in their values.
The currency flow in the country is controlled
by the Qatar Central Bank that was established
in 1993 and took over the functions of the Qatar
Monetary Agency that had been issuing the
national currency since 1973. The currency is
issued in both, coinage that is denominated in
dirham and paper form that is denominated in
riyal. The coins are minted in 5 face values
namely 1 dirham, 5, 10, 25 and 50 dirhams. The
1, 5 and 10 dirham coins are produced using
bronze as their basic constituent and due to
this the natural color of the coins turns out to
be brown. The rest two coins are produced using
copper-nickel and are silver in color. On the
obverse sides of all the coins is embossed the
official logo of the Qatar Central Bank that
shows a landscape showing a sailboat sailing
over a water body and palm trees in the
background. The reverse sides of the coins bear
their respective values engraved in Arabic
numerals. Currently the coin that has the least
value i.e. 1 dirham is almost out of the
circulation.
The paper currency
belonging to Qatari riyal is printed in 6
denominations that are 1 riyal, 5, 10, 25, 50
and 100 riyals. Arabic language is used
throughout the front sides of all the notes
including the numeral figures and on the
backsides of the notes, English is the language
used. The reverse sides also possess different
images relating to various important buildings,
animals and birds. The notes can be
differentiated according to their colors as all
the denominations have different predominant
colors mentioned in the list below
- 1 riyal note - Purple
- 5
riyal note - Green
- 10
riyal note - Orange
- 50
riyal note - Pink
- 100
riyal note - Yellow
- 500
riyal note - Blue
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| History |
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In times as early as in 3rd century BC, Hellenistic
currency prevailed in the land of Qatar. The Al
Khalifah clan, that belonged to the north and west of
the Arabian peninsula, immigrated to Qatar i.e. near
Bahrain Island during the 18th century and defeated
the formerly ruling Persians. The khalifahs, then
again shifted to Bahrain and made Qatar their
dependency. With the help of Britain, Qatar was
successful in detaching itself from Bahrain and formed
a new independent state in 1868 and in 1916; the
country officially became a British protectorate.
Qatar had still not produced its own currency and was
using British sovereign gold coins and Maria Theresa
silver thalers as its mainline currencies. Other
currencies, most importantly, the Indian rupee also
used to circulate in the country till 1959 when it was
taken over by the Persian Gulf rupee issued by the
central bank of India.
In 1966, Indian currency had to
encounter a drastic drop in its value and the value of
Gulf rupee was affected directly. Measures were taken
straight up and Qatar decided to introduce its own
currency and till the decision was executed, Saudi
riyal was adopted as the interim official currency of
the country. In the same year, Saudi riyal was
replaced with Qatar and Dubai riyal at par, a currency
that was issued by Qatar and Dubai jointly. Qatar
joined the Federation of Emirates in 1969 along with
Bahrain and Trucial States. But as a result of
regional disputes, Bahrain and Qatar parted off with
the federation and declared themselves independent on
1st September 1971. The country made use of Qatar and
Dubai riyal till 1973 when Dubai joined the UAE and
discontinued issuing the currency. Qatar then launched
its own currency with the name Qatari riyal.
The responsibility to issue
banknotes of the currency in Qatar was given to Qatar
Monetary Agency that performed its functions till 1996
and handed over the authority and responsibility to
Qatar Central bank. The 3 gulf countries namely Qatar,
Bahrain and United Arab Emirates came into an
agreement of having interdependent exchange rates @ 1
Bahrain dinar = 10 Qatari riyals = 10 UAE dinars in
1978 but the agreement only lasted for 1 year till
1979 as Qatar revalued its currency.
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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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