Saudi Arabia’s Crown Prince and First Deputy Prime Minister Mohammad bin Salman bin Abdulaziz Al Saud (better known as MBS) has been in the news recently for flexing his financial muscle in advance of inheriting the thrown from his father, King Salman, who is still alive.
MBS has recently had some members of the royal family arrested, intervened in war-torn Yemen, and proposed controversial economic, social, and religious changes into the future through a plan called Saudi 2030.
MBS’ footprint can already be seen on Saudi Arabia’s currency as well. At his instruction, the kingdom was preparing to introduce 1- and 2-riyal coins in early December, while phasing out the existing 1-riyal bank note.
Saudi Arabia currently uses coins in denominations of 1, 10, 25, and 50 halala. (100 halala equals one riyal.) The Saudi Arabian Monetary Agency currently issues bank notes in denominations of 1, 5, 10, 50, 100, and 500 riyals. Plans call for the 1-riyal bank note to be phased out in favor of the coin.
On Dec. 9, the Ministry of Labor and Social Development gave all domestic employers six months to implement paying all domestic workers under their sponsorship exclusively through prepaid payroll or salary cards “to protect their wages and ensure that they get their salaries on time,” according to the newspaper Al-Eqtisadiah. This electronic system will likely impact the use of physical coins and bank notes.
According to the most recent issue of MRI’s Bankers Guide to Foreign Currency, “Older 1-, 5-, 10-, 20, 50-, 100-, 200-, and 500-riyal notes on which either King Fahd bin Abdulaziz Al Saud or Abdul Aziz ibn Saud are identified as being legal tender, but outmoded. Foreign currencies can be imported or exported, however Israeli currency is expressly forbidden.”
The SAMA distributed a letter to all banks in Saudi Arabia instructing the banks to stop dealing with the 1-riyal bank note progressively. The coin is anticipated to have a 20- to 25-year life span as compared to an estimated 12 to 18 months for the bank note of the same denomination.
According to the Dec. 3 online posting by R-S Tech, “During the launching event of the new currency, SAMA informed that procedures are being adapted for handling the coins across all the commercial banks and informed that high-speed checking machines are also installed and that the new released monetary currency would be accepted to provide circulation.”
The posting continues, “The preparations are at various stages and the complete process may take approximately a time frame of six months.”
The newspaper Al-Eqtisadiah added, “…it [the transition] would be overseen by specialist global companies.”
The first coins issued in the name of Saudi Arabia were copper-nickel quarter- and half-, and a silver 1 riyal coin dated 1935 that replaced coins of 1927 with a legend including the king’s titles as “King of Hejaz and Sultan of Nejd.” In 1937, copper-nickel coins were issued in denominations of quarter, half and 1 qirsh. Many of these coins were later countermarked with 65 (AH 1365 or 1946 C.E.) in what the Standard Catalog of World Coins says was “a move to break money changers’ monopoly on small [denomination] coins.”
The bronze 1-halala denomination was issued in 1963, followed in 1972 by copper-nickel 5, 10, 25, and 50 halala identified in ghirsh or riyal. A copper-nickel composition 1 riyal on which the denomination is expressed as 100 halala first appeared in 1976. The new 2016-dated 1- and 2-riyal coins are a ringed bimetal issue.
The Saudi Arabian Monetary Agency was renamed the Saudi Arabian Monetary Authority on Dec. 4, 2016. The change was an effort to translate the name more accurately, rather than due to any internal changes in the central bank.