As soon as Saudi Arabia was founded in 1932, the riyal was introduced as official currency. Riyals were used exclusively in the Hijaz region before the country was founded. Smaller and lighter silver coins with the name of the country were minted for the first time in 1935.
The Saudi Arabian Monetary Authority (SAMA) was established in 1952 to bring the Saudi monetary system together. Since the country is doing extremely well economically, the King decided to replace metal coins with banknotes. Apart from that, pilgrims found it is extremely difficult to carry loads of silver Saudi Riyals during Hajj seasons.
The first Saudi Banknotes or pilgrims’ receipts were introduced in 1953. Each note was worth 10 silver riyals. Notes worth 5 million riyals were printed in Arabic, Persian, English, Urdu, Turkish and Malayan in the first batch. It became popular and was widely circulated throughout the Kingdom.
However, soon these receipts were collected by pilgrims as souvenirs. Officials put a ban on commercial use of these notes in other countries. Due to growing popularity, the same notes were issued again in 1954 along with a new 5 riyal denomination. The 1 riyal pilgrims’ receipt was also introduced in 1956.
People continued using the same receipts even after Hajj as they were more convenient for transactions. Saudi banknotes were officially circulated in June 1961, in denominations of 1, 5, 10, 50 and 100 riyals while the pilgrims’ receipt was slowly removed from circulation in 1965.
Saudi banknotes have increased the value of Currency. The number of Hajj pilgrims keeps on growing annually, creating a huge demand for riyals. Apart from that, a lot of foreign-currency is also exchanged during the Hajj Season, which invariably increases the value of riyals.
Image Courtesy: SAMA