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Thu. Oct 1st, 2020

Hajj was the reason for the birth of the paper riyal, as you know it today

In 1953 AD, after the efforts made by King Abdulaziz to unify the Kingdom of Saudi Arabia in its current form, and to unify the monetary system in it. He was looking for much further afield, especially in light of the successive economic developments at the time and the significant growth of state revenues, especially during the Hajj season.
In those days, coins were the main and circulated currencies, and it was noticed that it was difficult to carry and move with them for the pilgrims, so King Abdulaziz and the Monetary Agency had only to think of a more innovative way to facilitate the affairs of the pilgrims who faced unimaginable hardship from carrying the heavy silver riyals. And here was the boldest step in the Saudi monetary system, which was represented by the Monetary Agency issuing what was known at the time as pilgrims’ receipts, in denominations of ten riyals.

These receipts were printed in five million copies, as a first and experimental edition. Multiple phrases are written on this receipt in Arabic, Farsi, English, Urdu, Turkish, and Malay. She was saving for the owner the value of this receipt in Saudi silver riyals. Despite the Foundation’s fear, this experience met with widespread resonance among the pilgrims of the Sacred House, and on the contrary, this idea won the confidence of people in the local Saudi market from merchants and citizens. The popularity of the idea extended until these receipts became models and gifts for pilgrims to take abroad, which prompted the Ministry of Finance and Economy to prohibit these receipts from being issued abroad for commercial use.

After the success of the idea of paper receipts, in the Hajj season the following year 1954 AD, the Foundation returned to issuing three denominations: the ten riyals, the five riyals and the one riyal denomination. Not only here, but after this success, citizens and pilgrims continued to circulate it and did not exchange those receipts for a coin.

Later, the Saudi riyal paper currency was issued in its common form today in denominations: 1, 5, 10, 50, 100. After the experience of issuing and circulating the pilgrims’ receipts.

Also, the Hajj was not only a reason for its origins in the paper riyal, but also for its high price, for after more than 60 years, thousands of pilgrims arrive today in Mecca in one season, who meet in a few days to perform the rituals of Hajj, thus forming a million of the Muslim crowd. Their numbers multiplied tens of times since the days of King Abdulaziz.

They come from many countries, and they speak different languages and dialects, with many material classes, and many cultural and social differences. The most important thing is that they come in different currencies to exchange in the Saudi paper riyal, which increases the demand for it, the increase in its price, and the recovery of its market.

The volume of Saudi riyals purchased today during the Hajj season is three times what is bought throughout the year. As for the currencies that we spend today, pilgrims from Indonesia prefer to come in their local currency instead of bringing dollars, due to the high taxes in Indonesia. Pilgrims coming from Europe and North Africa will make the euro their choice, while the first choice for other nationalities is the US dollar. As for the only currency that is forbidden to be circulated, the Israeli shekel, so the Palestinians are keen to use the dollar or the Jordanian dinar

Hajj Media

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