UAE Dirham Overview
The UAE Dirham or Emirati Dirham is the official currency of the United Arab Emirates (UAE). Abbreviated as 'AED,' you'll often come across more casual versions like 'Dh' or 'Dhs.' The name 'Dirham' has a fascinating origin, as it originated from the Greek word "drachmae," signifying "handful." This currency was officially introduced in circulation on May 19, 1973. Before that, Abu Dhabi used the Bahraini Dinar, while Dubai and its fellow emirates used the Qatar-Dubai Riyal.
Emirati Dirham Currency Facts
| UAE Dirham Stats | AED Profile |
| Name: | UAE Dirham or Emirati Dirham |
| Nickname: | Dirham |
| Symbol: | AED‎ |
| Date of Introduction: | May 19, 1973 |
| AED in Circulation: | Approximately AED 580 billion |
| Banknotes: | Frequently Used: AED 5, 10, 20, 50, 100, 200, 500 Rarely Used: AED 1000 |
| AED Notes Made of: | 75% cotton and 25% linen blend |
| Current AED Coins: | 1, 5, 10, 25 and 50 fils and 1 dirham |
| AED Coins Made of: | Metals such as nickel, copper, and brass |
| Countries using AED | United Arab Emirates |
History of the UAE DirhamÂ
The history of the UAE Dirham unfolds as a testament to its stability and strategic economic decisions, particularly in its prolonged pegging to the US Dollar. This history positions the Dirham as a symbol of economic strength and reliability on the global stage.
1. Introduction of the UAE Dirham (AED):
The UAE Dirham, or AED, became the official currency in 1973, just two years after the unification of the Emirates. Before the adoption of the Dirham, different regions used the Qatar and Dubai riyal, while Abu Dhabi utilized the Bahraini Dinar.
2. Inaugural Coin Minting:
Upon its introduction in 1973, the AED saw the minting of various coin denominations. The 1, 5, and 10 fils coins were crafted in bronze, while the rest were made of cupronickel. These coins maintained a size and composition similar to the corresponding Qatar riyal.
3. Introduction of Banknotes:
The first series of AED banknotes was issued in 1973, marking a crucial milestone in the currency's history. A second series followed in 1982, replacing denominations of 1 and 1000 dirhams. The year 1983 witnessed the introduction of 500 dirham notes, with the addition of 200 dirham notes in 1989. In the year 2000, 1000 dirham notes were reintroduced.
4. Reduction in Coin Size
In 1995, a significant change occurred with a reduction in size for the 1, 5, and 10 fils, along with a transformation in the 1 dirham coin's diameter, aligning it with the old 50 fils coin. The 50 fils coin also underwent a size reduction and acquired a heptagonal shape.
5. Link to the US Dollar:
Since November 1997, the UAE Dirham has been pegged to the US Dollar. As the UAE Dirham has been tied to the US Dollar for years, it has the relative stability and influence of the US Dollar. The value of the Dirham follows similar trends as the dollar in terms of devaluation or revaluation.
6. Pegging Benefits:
The pegging of the Dirham to the US Dollar for almost 30 years provides various advantages.
It facilitates precise trade by keeping the exchange rate low, ensuring accuracy in the value of imported or exported products to and from the US.Â
7. Global Economic Impact:
The fixed currency rate offers protection to the UAE's domestic economy, shielding it from the unpredictable nature of the global market. The UAE Dirham's stability also contributes to the country's global economic standing, making it one of the world's richest nations.
8. Adjusting the Peg
There were some discussions in the year 2015 about the possibility of adjusting the peg or even abandoning it altogether. However, the UAE government has repeatedly reaffirmed its commitment to the peg.
Significance of Emirati DirhamÂ
The UAE Dirham (AED) holds a unique and significant position in the global financial landscape, primarily owing to its strategic pegging to the US Dollar. This pegging ensures that any fluctuations or adjustments in the AED's value align closely with changes in the US Dollar. Due to this, AED is one of the most stable currencies worldwide. Â
The pegging of the AED to the US Dollar also facilitates international trade, providing a steady and predictable exchange rate. This predictability is instrumental for businesses engaged in importing and exporting, particularly with the United States. The stability of the AED has shielded the UAE's economy from the volatility often associated with global currency markets. This resilience contributes to the overall significance of the currency and reinforces the country's position as one of the world's richest nations.
Current UAE Dirham Notes & Coins
1. The United Arab Emirates Dirham (AED) was established as the legal tender of the country on May 19, 1973.Â
2. Over the years, the currency has undergone key changes in its denominations and designs, reflecting the economic growth and stability of the United Arab Emirates.
3. In terms of coins, denominations of 1, 5, 10, 25, and 50 fils, along with 1 dirham, are currently in circulation.
4. The 1, 5, and 10 fils coins are crafted in bronze, while the others are made of cupronickel.
5. Banknotes are currently available in denominations of 5, 10, 20, 50, 100, 200, 500, and 1000 dirhams.
6. The first series of banknotes made its debut in 1973, followed by a second series in 1982, replacing denominations of 1 and 1000 dirhams.
7. Additional denominations were introduced over the years, including 500 dirham notes in 1983, 200 dirham notes in 1989, and the reintroduction of 1000 dirham notes in 2000.
8. As of now, the Central Bank of the United Arab Emirates is the authority responsible for minting coins and issuing banknotes.
9. Commemorative coins have been minted by the Central Bank of the United Arab Emirates since 1976, celebrating significant events and rulers of the UAE.
How to Spot Counterfeit AED Notes?
To make sure an AED note is real, you can do a few simple things. One reliable technique involves examining the notes under ultraviolet light. Genuine Dirham notes reveal brilliant red, gold, and green colors, distinctively under UV light. The absence of these vibrant hues could be indicative of a counterfeit note.
Another key security feature to assess is the metallic thread incorporated within authentic Dirham notes. This metallic thread, appearing as a continuous dark line across the note, serves as a robust anti-counterfeiting measure. Any irregularities or breaks in this thread may signal the presence of a counterfeit. Additionally, Authentic Dirham notes typically possess raised areas and textures that can be felt when running fingers over the surface. A completely flat note, without any texture, may raise suspicions regarding its authenticity.
How Do We Measure The Value Of AED?
The value of the AED (United Arab Emirates Dirham) is measured through an AED Index, which functions as a comparative metric and evaluates the dirham against a diverse basket of currencies. This basket typically encompasses notable currencies from key global regions, offering a holistic assessment of the dirham's performance in the international currency market.Â
What is the UAE Dirham Index (AEDX)?
The AED Index serves as a valuable tool for investors, economists, and policymakers, providing insights into the dirham's strength or weakness relative to a diversified range of currencies. This comprehensive tool helps to understand the AED's position in the global economic landscape.
Here are a few key points about the AED index:
1. The AEDX is calculated based on the weighted average of the value of UAE Dirham against major currencies.
2. The weights assigned to each currency reflect their relative importance in international trade.
3. A rising AED Index signals a strengthened AED when measured against the basket of currencies. This uptrend implies that AED has gained value in comparison to its counterparts.Â
4. Conversely, a declining index suggests a weakened AED in relation to the basket, indicating a decrease in its value on the global stage.
Benefits of buying/selling AED from BookMyForex
You can buy or sell AED online at the best rates with BookMyForex, a leading forex platform in India. On our site, you will find the live & transparent AED rates as the rates get updated every 3 seconds. You get the following benefits when buying or selling AED :Â
1. BookMyForex offers the best rate for AED to INR, or vice versa
2. You can place your order online 24x7 at live rates
3. Rates are compared across hundreds of money changers in your area
4. Same-day delivery of AED currency notes is available
5. Freeze your desired rates for up to 3 days by paying a refundable deposit of 2%
