Forex & Currencies Trading

Qatari Riyal (QAR)

What is Qatari Riyal (QAR)?

QAR is the currency code for the Qatari Riyal, the currency of the State of Qatar located on the coast of the Arabian Peninsula. The Qatari riyal consists of 100 dirhams. The abbreviation of currency is QR, in English. The rial is also often referred to as the rial. All Qatari banknotes and coins are issued by the Qatar Central Bank, whose objectives include currency stability and currency regulation.

key takeaways

  • The Qatari Rial is the official currency of the State of Qatar. The currency code is QAR, abbreviated as QR.
  • QAR is pegged to the US dollar at a rate of 1 USD/QAR 3.64 and is allowed to fluctuate in a range between 3.6385 and 3.6415.
  • The Central Bank of Qatar oversees the issuance of the currency and has regulatory control over maintaining the currency peg.
  • Although Qatar did drop to 3.81 in 2017 (in foreign markets), at that time several countries severed diplomatic relations with Qatar over terrorism allegations.
  • Qatari riyal banknotes come in denominations of 1, 5, 10, 50, 100 and 500 riyals. Coin denominations are 1, 5, 10, 25 and 50 dirhams.

Understanding Qatari Riyal (QAR)

When Dubai entered the United Arab Emirates (UAE) in 1973, the Qatari riyal replaced the Qatari and Dubai rials. At this time, Qatar began to issue the riyal separately. The Qatar and Dubai riyal came into effect in 1966, when the previous currency, the Indian rupee, was replaced due to the devaluation of the Indian currency.

The rial is pegged to the US dollar (USD) at 3.64 QAR per US dollar, or USD/QAR = 3.64. The peg came into force in 2001 when it was written into law by royal decree. By law, the currency will remain within a range of 3.6385 to 3.6415 rials per dollar.

With Qatar’s economy heavily reliant on commodities such as oil and gas, its currency peg reduces potential economic shocks, as those commodities are priced in dollars. The oil and gas industry accounts for the majority of Qatar’s gross domestic product (GDP).

Qatari riyal banknotes come in denominations of 1, 5, 10, 50, 100 and 500 riyals. Coin denominations are 1, 5, 10, 25 and 50 dirhams.

currency fluctuations

In 2017, the value of the rial in offshore markets changed after some foreign countries stopped dealing with Qatari banks, creating a liquidity shortage that pushed the value of the rial to 3.81 in some foreign markets.

During and after this period, the official pegged rate of 3.64 remains in effect within Qatar. The period, known as the diplomatic crisis, was due to the severance of diplomatic relations by several countries and the fact that Qatar was not allowed to use its airspace or sea lanes because of its alleged support of terrorism.

currency exchange

If traveling to Qatar, the fixed exchange rate is 3.64 Qatari riyals per US dollar. Unfortunately, real-time exchange is not the rate that travelers who want QR cash get. Banking and currency exchange services typically charge a service fee of 3% to 5% and factor this into the exchange rate they offer their customers. So instead of QR3.64 per dollar, the traveler might get 3.46, which is almost a 5% reduction.

Currency exchange makes money from the difference between two exchange rates.

Suppose the traveler converts USD 1,000 at this exchange rate and receives EUR 3,460. They spend some of it on the trip, but not all. When they return to the United States, they want to convert the remaining 1,500 euros into dollars.

$169 billion

Qatar’s GDP in 2021 is expected to increase to $181 billion in 2022.

The official exchange rate for USD/QAR remains at 3.64. To find the dollar value of each QAR, divide 1 by 3.64 for a ratio of 0.274725. This is the Qatari Rial/USD exchange rate.

Therefore, the expected amount the traveler will receive is $412.09 (QR1,500 x $0.274725). But keep in mind that banks and currency exchanges usually charge a service fee and include that fee in the exchange rate.

Thus, instead of $0.274725 per QAR, travelers may receive a price closer to $0.261, which is almost a 5% reduction. So instead of $412.09 they received $391.50 (QR1,500 x $0.261).

Is Qatari currency pegged to another currency?

The Qatari currency is pegged to the US dollar at a fixed exchange rate of 1 US dollar to QR3.64.

What was the Qatari currency before the rial?

The currency used by Qatar before the riyal was the Dubai riyal. Before that, it used Saudi Riyal. Before the Saudi riyal, the main currency was the Gulf rupee.

Which countries use the Rial?

Countries that use the rial include Qatar, Saudi Arabia, Iran, Oman, Yemen.

Related Posts

1 of 2,105

Leave A Reply

Your email address will not be published.