Oman is a relatively small oil-producing country with a small population. The country has experienced a continuous expansion of GDP over the last 50 years, growing by 339% in the 1960s before scaling back to the modest 13% in the 1980s. The government of Oman has tried to expand export of liquefied natural gas and promote foreign investment in the petrochemical, telecommunication, and electric power. However, structural reforms are still required to improve the business environment. Oman’s banking sector continues promote country’s economy despite the declining oil prices that have constricted lending opportunities.
Oman is one of the three countries that use rial currency with the other countries being Yemen and Iran. The Omani rial is subdivided into smaller units (1000) known as baisa. The Omani currency is found both in coins and banknotes form and is managed by the Central Bank of Oman. The rial was adopted in the early 1970s in place of the Indian rupee and as part of the modernization effort. The Omani rial is pegged to the United States dollar with the rate adjusted in 1986. The rial is the only legal tender unit in Oman with foreigners and visitors expected to convert their currencies to rial before they can make any purchase in the country.
Breaking Down the Oman Rial
Before 1940, Oman and Muscat used Indian Rupee and Maria Theresa Thaler as the official currency. The Rupee circulated mainly in the coast while the Thaler was used in the interior of Oman. The thaler was valued at 230 paisa with one rupee equaling 64 paisa. In 1940, coins were minted for use in the Dhofar and in 1946, coins were introduced in Oman. Both the coins introduced in 1940 and 1946 were in baisa denominations. The Indian Rupee and the Gulf Rupee continued to circulate alongside the coins. In 1970, Oman made rial Saidi its official currency, replacing the Gulf Rupee at an exchange rate of one rial for 21 rupees. The new currency was equal to the British pound and was subdivided into 1000 Baisa. Rial Saidi was replaced at par with the Omani rial in 1973.
In the 1890s coins of several denominations were minted for use in Muscat and Oman. In 1940, coins were minted in baisa denomination for use in Dhofar. In 1948, rial coins in the denomination of 0.5 were added to the biasa coins. In 1946, biasa coins in the denominations of 2, 5, and 20 were introduced in Oman, followed by rial coins in 1960. In 1970, common coins for both Muscat and Oman were introduced in biasa denominations ranging from 2 to 100 biasa. In 1975, new coins bearing the country’s name were issued. Currently, the coins in circulation include 5, 10, 25, 50, and 100 biasa.
Oman and Muscat issued the first banknotes in 1970 in biasa and rial Saidi denominations. In 1972, the Oman Currency Board issued 100 biasa and Omani rial coins in the denominations of ¼, ½, 1, 5, and 10. From 1977, the Central Bank of Oman has had the sole responsibility of issuing notes. Currently, the notes in circulation are in the denominations ranging from 100 biasa to 50 rials.