Saudi Riyal (SAR) Overview
The Saudi Riyal (SAR) is the official currency of Saudi Arabia, a country known for its dominance in the global oil industry. The currency, denoted by the symbol SR, is subdivided into 100 halala. The Saudi Riyal maintains a fixed exchange rate, pegged to the US Dollar at 3.75 SR. This stability in the exchange rate provides a sense of predictability for businesses and investors, contributing to a conducive economic environment. The peg also serves as a strategic measure to safeguard the Riyal's value and promote financial stability in the region.
Saudi Riyal Currency Facts
| Saudi Riyal Stats | SAR Profile |
| Name: | Saudi Riyal |
| Nickname: | Riyal, SAR |
| Symbol: | SR, SAR |
| Date of Introduction: | 1935; 88 years ago |
| SGD Currency in Circulation: | SG$100 billion |
| Banknotes: | Freq Used: 100SR, 50SR, 20SR, 10SR, 5SR, 1SR Rarely Used: 1000SR, 500SR |
| SAR Notes Made of: | Polymer |
| Current SAR Coins: | One-half Riyal, One Riyal, Five Riyals, Ten Riyals, Twenty Riyals |
| Coins Made of: | Nickel, copper, and zinc |
| Countries using SAR: | Saudi Arabia |
History of the Saudi RiyalÂ
The history of the Saudi Riyal (SAR) is a dynamic narrative that unfolds through key milestones, reflecting the evolution of Saudi Arabia's economic and monetary landscape.
1. Formation of Saudi Arabia:
In 1932, the Kingdom of Saudi Arabia was established by the merger of the Kingdom of Hejaz and the Sultanate of Nejd. The initial monetary system featured a bimetallic monetary system, relying on British gold sovereigns and silver Riyals. The first Saudi riyal coins were introduced in the year 1935.Â
2. Transition to a Unified Currency:
In 1952, Saudi Arabia underwent a significant monetary reform, transitioning from a bimetallic to a single-currency system. The Saudi Arabian Monetary Authority (SAMA) issued the first banknotes in 1953, known as Haj Pilgrim Receipts, initially designed for pilgrim foreign exchange transactions.
3. Introduction of Fiat Money:
Until 1959, the Saudi Riyal was backed by Saudi gold guineas, equivalent to the value of the British gold sovereign. In 1959, the monetary landscape underwent a crucial shift as Saudi Arabia adopted a fiat money system issued by the Saudi Arabian Monetary Agency, which later became the Saudi Central Bank. This marked the end of the gold-backed system, emphasizing the use of currency without a commodity value.
4. Replacement of Haj Pilgrim Receipts:
In 1961, the Saudi Arabian Monetary Agency (SAMA) replaced Haj Pilgrim Receipts with regular banknotes, signifying a step towards a more standardized currency. The official phase-out of Haj Pilgrim Receipts occurred in 1964, consolidating the usage of standardized banknotes. In 1963, the currency again underwent a subdivision change, replacing the Ghirsh with the Halala, where 1 Halala equaled one-hundredth of the Saudi Riyal.
5. Pegging to the U.S. Dollar:
In 2003, the Saudi riyal was officially pegged to the US dollar at the fixed exchange rate of 1 USD = 3.75 SAR. The pegging to the US dollar provided a lot of stability in the exchange rate. Note that prior to this, the Riyal was pegged to the Special Drawing Rights (SDR), a basket of currencies created by the International Monetary Fund.Â
6. Riyal Speculation and Global Events:
In 2007, Riyal surged to a 20-year high when the U.S. Federal Reserve drastically reduced interest rates after the Great Recession. Despite external pressures, the Saudi Central Bank opted to maintain the fixed exchange rate of 3.75 SAR to USD to avoid potential hyperinflation. The event highlighted the challenges of a pegged currency in times of financial crisis.
Significance of the Saudi Riyal (SAR)
The significance of the Saudi Riyal (SAR) extends far beyond its role as a mere unit of currency. Saudi Arabia's economy is predominantly fueled by its oil and gas sector, constituting 12% of the world's total output. Despite the shifts in global oil production rankings, Saudi Arabia has consistently held its position as the world's largest petroleum exporter.Â
The riyal is pegged to the US dollar, providing a stable exchange rate and fostering confidence in the currency. Given that crude oil, a primary Saudi export is priced in US dollars, a strong connection between the SAR and the USD exists. Saudi Arabia's Vision 2030 seeks to reduce reliance on oil, aiming for economic diversification. As this initiative progresses, the significance of the Saudi Riyal in global markets is anticipated to broaden beyond its current linkage to oil.
Current Saudi Riyal Notes & Coins
1. The official currency of Saudi Arabia is the Saudi Riyal (SAR), which is subdivided into 100 Halalas.Â
2. Saudi Riyal coins are available in denominations of 1, 2, 5, 10, 25, and 50 halalas, as well as 1 and 2 riyals.
3. The 1 and 2 riyal coins are bimetallic, made of a nickel-plated steel core surrounded by an outer ring of copper-nickel alloy
4. The coins feature the Saudi Arabian coat of arms on one side and various national landmarks or symbols on the other.
5. The Saudi Arabian Monetary Authority (SAMA) is responsible for the minting and issuance of coins.
6. Saudi Riyal notes are available in denominations of 1, 5, 10, 20, 50, 100, 200, and 500 riyals.
7. Denominations are clearly expressed in both Arabic and English numerals.Â
8. All banknotes are manufactured from polymer, a robust and secure material resistant to wear and tear.
9. Banknotes display portraits of King Salman (for denominations ranging from 5 to 100 riyals), King Abdulaziz Al Saud (for the 500 riyals note), and various other landmarks and symbols representing Saudi Arabia.
 10. To deter counterfeiting, these banknotes integrate advanced security features such as watermarks, holograms, micro printing, and security threats.
How to Spot Counterfeit Saudi Riyal Notes?
Spotting counterfeit Saudi Riyal notes is crucial to avoid falling victim to fraud. There are some reliable methods to distinguish genuine Saudi Riyal notes from counterfeit ones. Examine the note carefully to ensure that the features match the designated denominations. For instance, £5 and £10 notes should have gold foil, £20 and £50 notes should have gold and blue foil, and the £50 note should have gold and green foil.
Genuine Saudi Riyal notes are printed on polymer, a thin and flexible plastic. Counterfeit notes may use different materials, so feeling the texture of the note can be a useful indicator. Check the note under UV light to verify its authenticity. There should be a red and green glow on the authentic note's number under UV light, while the backdrop should have a duller color. Counterfeit notes may not exhibit the same fluorescent response.
How Do We Measure The Value Of SAR?
The SAR Index is a useful tool for measuring the relative value of the Saudi Riyal against other currencies. For instance, a rising index signifies an increasing strength of the Saudi Riyal concerning the other currencies within the index. Conversely, a declining index signals a weakening position of the Saudi Riyal relative to the other currencies within the index.
What is the Saudi Riyal Index (SARX)?
The Saudi Riyal Index (SARX) is a financial index that measures the performance of a basket of currencies against the Saudi Riyal. It is used to check the strengths and weaknesses of the Saudi Riyal currency against a basket of major currencies. The tool helps individuals make informed decisions about buying or selling Saudi Riyal-denominated assets.Â
Here are a few key points about the Saudi Riyal Index:
1. The SARX is a broad-based index, including a wide spectrum of currencies. This enhances its effectiveness as a comprehensive measure of the Saudi Riyal’s performance.
2. The weight assigned to each currency within the index is determined by its relative importance in international trade.Â
3. This thoughtful weighting mechanism ensures that the index accurately reflects the influence of each currency, preventing dominance by any single currency.
4. Operating as a real-time index, the SARX is continuously updated throughout the day. This feature provides users with timely and relevant information, allowing for agile decision-making based on the latest market dynamics.
Benefits of buying/selling SARÂ from BookMyForex
You can buy or sell SAR online at the best rates with BookMyForex, a leading forex platform in India. On our site, you will find the live & transparent SAR rates as the rates get updated every 3 seconds. You get the following benefits when buying or selling SAR :Â
1. BookMyForex offers the best rate for SARÂ 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 SARÂ currency notes is available
5. Freeze your desired rates for up to 3 days by paying a refundable deposit of 2%
