Kuwaiti dinar

Kuwaiti dinar

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The dinar is the currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...

 of Kuwait
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...

. It is sub-divided into 1000 fils. It is the highest-valued currency unit in the world.

History


The dinar was introduced in 1961 to replace the Gulf rupee
Gulf rupee
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 initially equivalent to one pound sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...

. As the rupee was fixed at 1 shilling
Shilling
The shilling is a unit of currency used in some current and former British Commonwealth countries. The word shilling comes from scilling, an accounting term that dates back to Anglo-Saxon times where it was deemed to be the value of a cow in Kent or a sheep elsewhere. The word is thought to derive...

 6 pence
British One Penny coin (pre-decimal)
The English Penny, originally a coin of 1.3 to 1.5 g pure silver, includes the penny introduced around the year 785 by King Offa of Mercia. However, his coins were similar in size and weight to the continental deniers of the period, and to the Anglo-Saxon sceats which had gone before it, which were...

, this resulted in a conversion rate of 13⅓ rupees to the dinar.

When Iraq
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....

 invaded Kuwait in 1990, the Iraqi dinar
Iraqi dinar
The dinar is the currency of Iraq. It is issued by the Central Bank of Iraq and is subdivided into 1,000 fils , although inflation has rendered the fils obsolete.-History:...

 replaced the Kuwaiti dinar as the currency and large quantities of banknotes were stolen by the invading forces. After liberation, the Kuwaiti dinar was restored as the country's currency and a new banknote series was introduced, allowing the previous notes, including those stolen, to be demonetized.

For a wider history surrounding currency in the region, see The History of British Currency in the Middle East.

Coins


The following coin
Coin
A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....

s were first introduced in 1961:
  • 1 fils (No longer issued)
  • 5 fils
  • 10 fils
  • 20 fils
  • 50 fils
  • 100 fils

Banknotes


To date five series of the Kuwaiti dinar banknote have been printed. The first series was issued following the pronouncement of the Kuwaiti Currency Law in 1960 which established the Kuwaiti Currency Board. This series was in circulation from 1 April 1961 to 1 February 1982 and consisted of denominations of ¼, ½, 1, 5 and 10 dinars.

After the creation of the Central Bank of Kuwait
Central Bank of Kuwait
The Central Bank of Kuwait was established in 30 June 1968 to offer a flexible currency system on behalf of the State of Kuwait. The Central Bank is currently building their new building in the Sahrq area....

 as a replacement to the Kuwaiti Currency Board, new ¼, ½ and 10 dinar notes were issued from 17 November 1970, followed by the new 1 and 5 dinar notes of the second series on 20 April 1971. This second series was likewise withdrawn on 1 February 1982.

The third series was issued on 20 February 1980, after the accession to the throne of Emir Jaber al-Ahmad al-Jaber al-Sabah
Jaber Al-Ahmad Al-Jaber Al-Sabah
Jaber III al-Ahmad al-Jaber al-Sabah, GCB , GCMG of the al-Sabah dynasty, was the Emir and thirteenth Sheikh of Kuwait, serving from December 31, 1977 until his death on January 15, 2006...

, at that time in denominations of ¼, ½, 1, 5 and 10 dinar. A 20 dinar banknote was introduced on 9 February 1986. As a result of the state of emergency after Iraq
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....

's invasion of Kuwait, this series was ruled invalid with effect from 30 September 1991. Significant quantities of these notes were stolen by Iraqi forces and some have appeared on the international numismatic market. The "Standard Catalog of World Paper Money" (A. Pick, Krause Publications) lists notes with the following serial number prefix denominators as being among those stolen:
Denomination Prefix Denominators
¼ dinar 54-86
½ dinar 30-37
1 dinar 47-53
5 dinar 18-20
10 dinar 70-87
20 dinar 9-13


After the liberation, a fourth series was issued on 24 March 1991 with the aims of replacing the previous withdrawn series as quickly as possible and guaranteeing the country's swift economic recovery. This fourth series was legal tender until 16 February 1995. Denominations were ¼, ½, 1, 5, 10 and 20 dinar.

The fifth series of Kuwaiti banknotes has been in use since 3 April 1994 and include high-tech security measures which have now become standard for banknotes. Denominations were as in the fourth series.

Fixed exchange rate



From March 18, 1975 to January 4, 2003 the dinar was pegged to a weighted currency basket
Currency basket
A currency basket is a portfolio of selected currencies with different weightings. A currency basket is commonly used to minimize the risk of currency fluctuations. An example of a currency basket is the European Currency Unit that was used by the European Community member states as the unit of...

. From January 5, 2003 until May 20, 2007, the pegging was switched to 1 U.S. dollar
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....

 = 0.29963 dinar with margins of ±3.5%. The central rate translates to approximately 1 dinar = 3.33745 dollars.

From June 16, 2007, the Kuwaiti dinar was re-pegged to a basket of currencies, and is now worth about US$3.45 (€2.37). It is the world's highest-valued currency unit.

See also

  • Gulf rupee
    Gulf rupee
    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...

  • Cooperation Council for the Arab States of the Gulf
    Cooperation Council for the Arab States of the Gulf
    The Cooperation Council for the Arab States of the Gulf , also known as the Gulf Cooperation Council , is a political and economic union of the Arab states bordering the Persian Gulf and constituting the Arabian Peninsula, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates...

  • Economy of Kuwait
    Economy of Kuwait
    Kuwait is a small, relatively open economy with proven crude oil reserves of about , i.e., about 9% of world reserves. Petroleum accounts for nearly half of GDP, 90% of export revenues, and 95% of government income. Kuwait lacks water and has practically no arable land, thus preventing development...


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