Arab Emirati Dirham

Short Facts about AED – Arab Emirati Dirham

Arab Emirati Dirham

Read our in-depth guide about the Arab Emirati Dirham (AED) below:

Introduced as Dirham on May 19, 1973, the AED substituted the Dubai and Qatar Riyal. A very important currency for the Middle East and in the Islamic world, the word ‘dirham’ is derived from ‘dirhem’, which again comes from ‘drachm’, meaning a coin in Greek. It is one of the very important and competitive currencies in the world. This currency came into being after the United Arab Emirates was formed, comprising of the 12 countries. Before the Dirham, the currency used in these countries was the Riyal. The subunit of this currency is ‘fil’ and can be divided into a hundred parts.


Common Names for AED

The abbreviation for the United Arab Emirates’ currency is AED. DH or Dhs, though unofficial, are some of the other names.


Countries with AED

Countries that use dirham as their official currency are the United Arab Emirates (U.A.E.) in Asia and Morocco in Africa.

Unofficial AED Countries

Countries using AED as their currency unofficially are the ones that are located in the Middle East of the world map, as well as various different Islamic regions of the world.


How much are the AED traded?

Since the co-relation between the U.S. dollar and the dirham is evident, the AED is traded by many countries at large. However, these trading activities of the AED are bound by the various terms and conditions that are imposed by the government of the respective countries.


Currency Symbol and ISO-code

The AED currency is denoted by the symbol “?.?” in the Arabic language, which roughly
translates into A.D. and according to the ISO 4217 standard, the ISO-code for dirham is 784.


Currency Crises with AED

The crisis regarding the currency arises because of the inflation problem in some countries. Due to inflation, the value of the currencies goes high and hence exchange rates become very difficult to ascertain, while trading takes place between any two countries. The U.A.E. has been facing this problem for quite some time. The problem also depends on many other factors. Some of the factors are the following: the capital that is flowing in and out of the countries, the limits that are imposed on the fluctuation rates by the government of the countries, the various funds that flow into the country due to the exchange of various bonds as well as stocks, etc.

Other currency crisis include forging of the bank notes. These are done by the criminals and it in turn devalues the money or the currency of the country.


Central Bank for the AED

This currency was made the official currency after U.A.E. was formed. Initially, the count and records of the currency was kept with the currency board of the United Arab Emirates. However, since 1982, this power of issuing currency notes has been vested upon the Central Bank of The United Arab Emirates.


Trade AED

Dirham has been a very important mode of trade between other countries of the world. This currency has been used as a mode of exchange for trade purposes as well. This currency is prevalent throughout the entire Middle Eastern part of the world and, hence, it is a very important currency for the Islamic region as well. Trade is very important for the country and this currency has ensured a flow of income in the country.


History of the AED

Dirham has made its way during the Ottoman Empire, courtesy the old practice of trade and handling of the currency that was carried out for several centuries. It was on May 19, 1973 when AED was first introduced as a replacement of equal value for the Dubai and Qatar Riyal. The latter two currencies had been in circulation since the year 1966 in almost all Emirates excluding Abu Dhabi, a place where the dirham currency was used to replace the Bahraini Dinar. All Emirates that were to constitute the UAE employed the Gulf Rupee before 1966. The Emirates adopted the Saudi Riyal for a brief period, just as in Qatar, during the state of transition from the Gulf rupee to the Qatar and Dubai riyal.


AED Vs. Other Currencies

The AED was officially included in the IMF’s SDRs or special drawing rights on January 28, 1978. In practice, however, AED is pegged to the American dollar most of the times. Since the November of 1997, the dirham has been pegged to 1 US dollar = 3.6725 dirham, which equates to approximately 1 dirham = 0.272294 dollars.


Pictures of AED notes and coins

Notes and coins of the Arab Emirati Dirham (AED) are seen in the image below:
UAE Dirham