Economics

What is the Currency of Bahrain?

The official currency of Bahrain is the Bahraini dinar.

What is the currency of Bahrain?

The currency used in Bahrain is the Bahraini dinar. The word dinar is derived from the Roman word “denarius.” It is denoted by two symbols; either BD or .د.ب. The Bahraini dinar is divided into smaller units of 1000 fils. The dinar was first used in 1965, replacing the Gulf rupee at a rate of 1 dinar = 10 rupees. It is the sole responsibility of the Central Bank of Bahrain to issue the dinar currency and monitor its circulation. The current inflation rate of the dinar is about 7%.

Features of Bahrain Coins

Coins in denominations of 100, 50, 25, 10, 5, and 1 fils were introduced in 1965. Some of them, such as the 1, 5, and 10 fils coins, were struck in bronze, while the rest were made of cupro-nickel metal. Later, the Bahraini coins were struck of brass instead of bronze and bimetallic material. Currently, the denominations used in Bahrain are 5, 10, 25, 50, 100 100 and 500 fils. The circulation of one fils coins was discontinued in 1966. The coins used today are made in different sizes. The five fils is 19 mm, 10 fils is 21 mm, 25 fils is 20 mm, 50 fils is 22 mm, and 100 fils is 24 mm wide. Their weights range between 2g and 6g.

History of Banknotes

The Bahrain Currency Board introduced the first notes used in Bahrain in 1965. They were of denominations 10, 5, 1, ½, and ¼ dinars. The 100 fils note was later introduced in 1967. Approximately six years later, the Bahrain Monetary Agency replaced the Bahrain Currency Board. Consequently, it issued a new batch of notes with denominations of 20, 10, 5, 1, and ½ dinars. This agency was renamed the Central Bank of Bahrain in 2006. Subsequently, in the year 2008, the agency introduced new notes. The Central Bank was determined to reflect the culture of Bahrain and its modern development on the new banknotes. Again on September 4, 2016, the Bahrain money minting body introduced new 10 and 20 dinars notes with enhanced security features. The colors of the Bahraini notes are brown, peach, red, blue, and green. Apart from the Bahraini dinar, Saudi Arabian riyals are also accepted in Bahrain. However, the Saudi 500 riyal note is an exception, and is typically only accepted by large airports, electronic shops, and supermarkets.

Foreign Exchange Rate

In 1980, the dinar’s value was fixed to the IMF’s special drawing rights (SDRs). Consequently, the value of the dinar was pegged at 1BD being equal to $2.65957 USD and 10 Saudi riyals. This rate of exchange was officially recognized in Bahrain in 2001. Currently, the Central Bank of Bahrain fixed the value of dinar against the US dollar at a rate of 1 US dollar = 0.376 BD. As of June 23, 2017, the US dollar to Bahraini dinar exchange rate is 1 USD = 0.3774 BD. Hence, the Bahraini dinar remains strong as ever against the US dollar currency.

More in Economics