Published On: Sun, Sep 27th, 2015

When Indian currency was used in the gulf countries

Share This

Gulf Rupee….Once Upon a time

As hard as to believe it may seem there was a time when gulf countries like Kuwait, Bahrain, Qatar, Muscat and Oman used the Indian Rupee issued by the government of India and the reserve bank of India as their currencies. The Gulf rupee also known as the Persian Gulf rupee, was a currency used in the countries of the Persian Gulf and the Arabian Peninsula between 1959 and 1966. It was issued by the Government of India and the Reserve Bank of India and was equivalent to the Indian rupee.

When India gained its independence on August 15, 1947, the new government replaced all symbols of the British colonisation in the currency with Indian ones. India allowed the UAE and the Gulf countries to use its rupee as the currency and the UAE continued to use the Indian rupee which was made by the East India Company. Rupee coins of seven denominations were used in the UAE, including Re1, half rupee, quarter rupee, one-and-a-half ana, half ana, quarter of ana, and half paisa.

The creation of a separate currency was an attempt to reduce the strain on India’s foreign reserves from gold smuggling. After India devalued the rupee on 6 June 1966, those countries still using it – Oman, Qatar, and the Trucial States (which became the United Arab Emirates in 1971) – replaced the Gulf rupee with their own currencies. Kuwait and Bahrain had already done so in 1961 and 1965, respectively.

The Indian Rupee is still accepted in neighboring countries and Zimbabwe. Although in Nepal Indian Rupee notes of  only denominations lower than Rs. 500 are accepted.

Leave a comment