Role of Hajj in the introduction of Saudi banknotes

Role of Hajj in the introduction of Saudi banknotes
A pilgrims’ receipt, printed in Arabic, Persian, English, Urdu, Turkish and Malayan. (Image courtesy SAMA)
Updated 22 August 2018

Role of Hajj in the introduction of Saudi banknotes

Role of Hajj in the introduction of Saudi banknotes
  • SAMA realized that citizens and pilgrims were happy for the old metal coins to be replaced with the paper notes

JEDDAH: The riyal became the currency of Saudi Arabia since it was founded in 1932. Before that the currency was being used only in the Hijaz region. The first Saudi currency bearing the name of the country, which was smaller and lighter than its predecessor, was minted in silver in 1935.
The Saudi Arabian Monetary Authority (SAMA), the second-oldest central bank in the Arab world, was created in 1952 to develop and unite the Saudi monetary system. Given the fast-paced growth of the economy and increasing revenues, King Abdul Aziz was aware that it was not realistic to continue using metal coins and there was a need for a more practical form of currency. In particular, piles of silver Saudi riyals were a heavy burden for pilgrims to carry with them during Hajj seasons.
In 1953, the king took a courageous decision to issue the first Saudi banknotes. They were known as “pilgrims’ receipts,” each worth 10 silver riyals.
The first batch of 5 million were printed in Arabic, Persian, English, Urdu, Turkish and Malayan. Pilgrims welcomed the new paper currency and it quickly became widely accepted throughout the Kingdom.
Its success encouraged confidence among Saudi traders and citizens. However, pilgrims started to collect the receipts as souvenirs and gifts to take back to their home countries, which prompted the Ministry of Finance and Economy to ban commercial use of them overseas. The acceptance and popularity of the receipts persuaded SAMA to re-issue them in 1954, with the addition of a new 5 riyal denomination, which was followed by 1 riyal pilgrims’ receipt in 1956.
SAMA realized that citizens and pilgrims were happy for the old metal coins to be replaced with the paper notes, so they decided to keep using it after Hajj, rather than returning to the old currency.
In June 1961, Saudi banknotes were issued for the first time, in denominations of 1, 5, 10, 50 and 100 riyals. As a result, the pilgrims’ receipt was phased out in 1965.
Hajj is not only the reason behind the introduction of Saudi banknotes, it has also played an important role in the increasing the value of the currency. As the number of pilgrims coming to Makkah has continued to grow every year, the demand for riyals has increased at banks and local and foreign exchanges; three times as many riyals are purchased during Hajj season than during the rest of the year. This inflates its value and refreshes the market.
The most-exchanged foreign currencies during Hajj are the US dollar, the euro, the Singapore dollar, the Indian rupee, the Indonesian rupiah, the Emirati dirham and the Malaysian ringgit.


Iran still a destabilizing influence in Middle East, Saudi Arabia committed to regional peace: Prince Faisal

Updated 05 December 2020

Iran still a destabilizing influence in Middle East, Saudi Arabia committed to regional peace: Prince Faisal

Iran still a destabilizing influence in Middle East, Saudi Arabia committed to regional peace: Prince Faisal
  • ‘Region has been unstable for some time and main source is Iran,’ FM
  • Faisal bin Farhan says Kingdom has always been in favor, supports US-Iran dialogue

RIYADH: Iran continues to fund terrorist militias to incite violence in the region, Saudi Arabia’s foreign minister said on Friday.
“The region has been unstable for some time and the main source of that instability is Iran and Iran’s continuing activity in the region and its continuing focus on exporting its revolution on making sure that it continues to be able to manipulate governments in various countries,” said Prince Faisal bin Farhan.
Speaking at the Mediterranean Dialogues Forum held in Rome, the Saudi minister said Iranian interference can be seen from Lebanon to Syria, from Yemen to Iraq, where Tehrain continues to fund militias and “use violence to try and further their political agendas, including attacking diplomatic missions.”
Prince Faisal also said that “we see Iran having a hand in terrorist plots throughout Europe and other places.”
He also said that the Kingdom does not support assassinations, adding that they are “not part of our policy,” referring to the recent killing of Mohsen Fakhrizadeh, an Iranian scientist linked to Tehran’s nuclear program, who died in hospital after he was gunned down in his car near the Iranian capital.
The foreign minister said the Kingdom supports dialogue between the US and Iran and has always been in favor of that.
“The Trump administration was open to dialogue with Iran, and it was Iran that closed the door to that dialogue,” he said, adding “we will be open to real dialogue in the future that addresses significant issues of concern,” including nuclear non-proliferation, use of ballistic missiles and “most importantly its destabilizing activities.”
He also said the without addressing Iran’s malign role, its funding of armed groups and terrorist organizations in the region and its “attempts to impose its will by force on other states, we are not going to have progress.”
On Saudi Arabia’s relationship with the US President-elect Joe Biden, Prince Faisal said: “I think we will have a positive engagement, there will not always be a full alignment and there will be areas of disagreement, this has always been the case and it’s the case between any two partners.
“But through discussion, dialogue and engagement we will find common ground and work together because in the end we are both committed to the same things,” he said, adding that these include commitment to a secure and stable region, a global community that works together toward multilateralism and respect for national sovereignty.
He said the Biden administration “will find that we have taken a very proactive, positive approach to Yemen by announcing a unilateral cease-fire sometime ago, we have engaged with them through the UN representative very strongly to try and facilitate a permanent declaration of cease-fire from all parties.”
However, he said that the Iran-backed Houthi militia have been reluctant to sign and have put “unacceptable demands which the government of Yemen has not been able to accept.”
The internationally recognized government in Yemen has been battling the Houthis since 2014 in what the United Nations says is one of the biggest humanitarian crises, with over 24 million people – around 80 percent of the population — in need of assistance.
“We are fully committed in Yemen to a political resolution to the conflict and we will work happily and very hard with the incoming (Biden) administration to make that happen,” he said.
While, on the issue of peace in the Middle East, the Saudi foreign minister said that the Kingdom supports a just peace agreement that gives the Palestinians an independent state.
Asked about the Abraham accords, which was an agreement signed by the UAE and Bahrain officially establishing diplomatic relations, the Saudi minister said that they were important steps toward a potential stable region.
“That did help take annexation off the table and they set the groundwork for potential engagement and we can see them as steps in the right direction, provided that we can now use those agreements as well, as a stepping stone to renew engagement between the Palestinians and Israelis, and work toward settling back a dispute that is fair and equitable to the Palestinians and delivers a sovereign state,” he said.
Addressing domestic issues, Prince Faisal referred to many reforms, including women’s rights and the youth.
“Youth and women empowerment are a key focus of Vision 2030 and giving them access to not just the labor market, which we have seen great success in women’s participation in the private sector that has increased by something like 300% over the last five years, and other very significant developments,” he said.
“We continue to work through our laws and legislations to ensure that we have a system that is comparable to any in the world and that is a key focus, because in order for us to empower our youth, they need to have a legal framework environment where they can act in a way that really opens up their potential,” he added.
Saudi Arabia’s Vision 2030 aims to transform the Kingdom into an economic and tourist hub, diversify investment opportunities and develop various public and private sectors in an effort to reduce its dependency on oil.
“That reform program remains on track and despite COVID-19 stifling it, we have refocused our attention and energy on the need to move that agenda forward and that includes opening up various sectors of the economy, whether it’s culture, entertainment, sports — all these areas that contribute to a diverse society and economy.”