Historical Sketch

In the 7th century, Islam was founded in the Hejaz region around the cities of Mecca and Medina. The succession of Islamic dynasties subsequently moved to Damascus and Baghdad, but the Sharif of Mecca obtained an influential position since the 10th century, the title had been held by the Banu Hashim family throughout time. The Ottoman conquest of the West Arabian coast in the early 16th century did not change the local power. The acclaimed Ottoman suzerainty also over the inlands of the Arab peninsula did not materialize. In the 1720s, the Al-Saud family established the Emirate of Diriyah after having obtained the support of the Al-Wahhab religious movement, which was advocating a traditionalist orientation to Sunni Islam. Diriyah expanded its power towards the Red Sea but got ultimately defeated by the Ottomans in the early 19th century. The Al-Saud withdrew and established the Emirate of Nejd, centered at the city of Riyadh. In 1891, the second Al-Saud state got defeated by the Al-Rashid family, who then established the Emirate of Jabal Shammar, centered at the city of Ha'il. The Al-Saud established their third state in 1902 when they reconquered Riyadh. This was the start of the unification of the Arab peninsula. In 1921, Riyadh crushed Jabal Shammar, and the Al-Saud ruler took on the title of Sultan of Nejd. On the Red Sea coast, during World War I and under British influence, the Sharif of Mecca of the Banu Hashim (Hashemite) family broke away from Ottoman suzerainty and proclaimed the Kingdom of Hejaz in 1916. The Al-Saud reached Mecca in 1925 and drove out the Banu Hashim ruler. The Kingdom of Hejaz got conquered and was ruled by the Al-Saud in personal union. Nejd was elevated to Kingdom in 1927, and in 1932, the Nejd and Hejaz were united to form the Kingdom of Saudi Arabia.

Monetary History Overview

During the 18th century, the silver Maria Theresa Thaler had flown into Arabia through long-distance trade and had become the unit of account. Turkish coinage was current in Hejaz. After its break away from Ottoman suzerainty, the Kingdom of Hejaz had introduced a set of silver coins in the Turkish standard but with 10% higher silver content. The Saudi government took over the standard including the odd subdivision of the Riyal into 22 Piastres. A royal decree created of early January 1928 created the Saudi Arabian Riyal as silver currency. The British Sovereign in gold was made current at 10 Riyals but was traded at bullion soon afterwards. In 1935, the weight of the Saudi silver coins was reduced to correspond to the Indian Rupee in silver. In October 1952, the Saudi Arabian Monetary Agency (Authority) began operations and modernized the currency system. The de facto silver specie currency was nominally abandoned, and the Riyal got pegged to the US Dollar. National gold coins in the size of the British Sovereign were produced but not issued and served as gold reserve of the Monetary Authority. Paper money issuance did not start yet, but in 1953, so-called "Hajj pilgrims' receipts" were made to be given to foreign Mecca pilgrims in exchange to their currencies. Instead of being redeemed against silver specie the began circulating also outside the pilgrimage areas. Beginning of 1960, the Saudi currency went decimal such that 100 Halala went to the Riyal instead of 22 Piastres. In June 1961 finally, the Monetary Authority began issuing state paper money and the popular Pilgrims' Receipts were recalled. The Dollar peg was adjusted in 1960 and remained unchanged until the early 1970s, when the Saudi Arabia did not follow the US devaluations. In 1975, the Riyal unpegged, but in June 1986, the Dollar peg got reinstated and has remained unchanged since then. In November 2020, the Saudi Central Bank took over from the Monetary Authority.

Albania joined the International Monetary Fund (IMF) on 26.08.1957.

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