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| United Arab Emirates dirham | |
|---|---|
| Name | dirham |
| Local name | درهم |
| Iso code | AED |
| Pegged to | United States dollar |
| Subunit name | fils |
| Subunit ratio | 100 |
| Issued by | Central Bank of the UAE |
| Date of introduction | 1973 |
United Arab Emirates dirham
The United Arab Emirates dirham is the official currency of the United Arab Emirates, introduced after federation by authorities in Abu Dhabi and Dubai and administered through institutions tied to Sheikh Zayed bin Sultan Al Nahyan, Rashid bin Saeed Al Maktoum, and other federal founders. The dirham replaced the Qatari riyal, Gulf rupee, and various regional coinages used in Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah, becoming central to trade in the Persian Gulf and linking to markets in London, New York City, Hong Kong, Frankfurt, and Mumbai.
The currency's origins trace to pre-federation currencies such as the Maria Theresa thaler, Indian rupee, Gulf rupee, and the use of the Indian anna and British pound sterling in treaty ports like Port of Muscat and trading entrepôts including Sharjah Fort and Al Ain. Following independence movements in the 1960s and the formation of the federation in 1971, monetary decisions involved rulers including Sheikh Zayed and councils modelled on advisory bodies like the Trucial States Council. The dirham was officially adopted in 1973 under a statute influenced by monetary advisers from Bank of England, International Monetary Fund, and private banks such as HSBC, Standard Chartered, and National Bank of Abu Dhabi. Early issuance featured motifs celebrating rulers and heritage sites like Qasr Al Hosn, Al Jahili Fort, and symbols connected to Pearl diving and the Camel. The peg to the United States dollar was formalized amid oil revenue growth following agreements with corporations such as ExxonMobil, BP, TotalEnergies, and organizations including Organization of the Petroleum Exporting Countries.
Issuance authority rests with the Central Bank of the United Arab Emirates, established to succeed earlier currency boards and coordinate with regional entities like the Gulf Cooperation Council and international institutions such as the World Bank. Leadership has included governors liaising with finance ministries in Abu Dhabi and Dubai and with sovereign wealth funds including the Abu Dhabi Investment Authority and Mubadala Investment Company. The Central Bank sets reserve requirements influenced by correspondence with counterparts such as the Federal Reserve System, the European Central Bank, the Bank of Japan, and advisory input from firms like McKinsey & Company and Goldman Sachs. Cash logistics and minting have been contracted to firms with histories of working with Royal Mint, De La Rue, and national mints of United Kingdom, Germany, and India.
Coins are issued in fils denominations derived from decimalization influenced by earlier Indian rupee systems; common coins include 1, 5, 25, and 50 fils. Banknotes appear in 5, 10, 20, 50, 100, 200, 500, and 1,000 denominations featuring portraits of founding figures like Sheikh Zayed and landmarks such as Burj Khalifa, Sheikh Zayed Grand Mosque, Jumeirah Mosque, and Dubai Creek. Design commissions have involved artists and institutions tied to Louvre Abu Dhabi and events like the Expo 2020 and Dubai International Financial Centre imagery, while security and printing collaborations referenced companies such as Giesecke+Devrient. Commemorative issues have highlighted state visits, jubilees of rulers from houses like Al Nahyan and Al Maktoum, and cultural festivals including the Abu Dhabi Festival and Dubai Shopping Festival.
Since its peg to the United States dollar, exchange operations reference markets such as the U.S. dollar index, trading hubs including Dubai Gold Souk, Dubai Multi Commodities Centre, and exchanges like Dubai Financial Market and Abu Dhabi Securities Exchange. Policy responses to oil shocks involved interactions with OPEC decisions and agreements with oil majors including Chevron and Shell. The Central Bank uses reserve and liquidity tools comparable to practices at the Bank of England and Swiss National Bank, and UAE monetary policy affects cross-border finance with corridors to India, China, United Kingdom, United States, and Saudi Arabia.
The dirham circulates in retail and wholesale transactions across sectors dominated by firms such as Emirates airline, Etihad Airways, DP World, Emaar Properties, Aldar Properties, Etisalat, and du. It is used in remittances involving migrant labor from India, Pakistan, Bangladesh, Philippines, Egypt, and Sri Lanka, and in commodity trade connected to Brent crude, Dubai Mercantile Exchange, and gold bullion dealings. Tourism flows tied to attractions like Palm Jumeirah, Burj Al Arab, Yas Island, and events including Abu Dhabi Grand Prix and Dubai World Cup generate cash demand, while fiscal policy coordination involves sovereign funds such as ADQ and central fiscal authorities in emirates such as Dubai Department of Finance and Abu Dhabi Department of Finance.
Modern banknotes incorporate anti-counterfeiting technology comparable to specimens from Banknote Museum, using features like intaglio printing, holographic threads supplied by firms such as SICPA, watermark portraits of national figures, microprinting inspired by practices at De La Rue, tactile marks for World Blind Union accessibility standards, and color-shifting inks akin to those used by the European Central Bank. Coin security includes alloy specifications and edge lettering similar to minting standards at the Royal Mint and mints in Germany and India.
Collecting communities for dirham issues intersect with numismatic societies such as the International Numismatic Council and regional clubs in Dubai, Abu Dhabi, Sharjah, and Ras Al Khaimah. Special issues commemorate anniversaries of rulers like Sheikh Khalifa bin Zayed Al Nahyan and events including National Day (United Arab Emirates), Dubai Expo 2020, and economic milestones recorded by institutions like the International Monetary Fund and World Bank. Auction houses including Sotheby's, Christie's, and regional dealers list rare specimens such as low-serial-number notes, misprints, and limited-mintage coins issued by emirates historically like Ajman and Ras Al Khaimah.