- The Gulf Emirate States are an amazing and rich area of the world, with the history of this region stretching back thousands of years. Prior to the discovery of oil there and the wealth from it, what today is the United Arab Emirates and Qatar were a bunch of independent Emirate States under an informal British protectorate, including a foreign monetary system. Due to changes made by other countries that controlled their currency, Dubai and Qatar for a short seven years issued their own joint coinage and currency system.
Qatar & Dubai AH1386-1966 25 Dirhams, PCGS MS64.
Under the British-ruled Trucial States, the area of the Gulf States, which included states that would later form the United Arab Emirates, Kuwait, Oman, Bahrain, and Qatar, the British formed a monetary policy that placed these states under the Indian Rupee currency. With Indian independence the currency of the Gulf States continued as the Indian Rupee. With the Indian Rupee pegged to the British Pound at 13-1/3 Rupees to the Pound, the currency was stable and for some traders lucrative. Traders in gold would take their precious metal to India and sell it for Indian Rupees, then take the Indian Rupee currency and trade it for more valuable foreign currency, which they would use to buy more gold and the cycle continued profiting with each transaction. This arbitrage became so great that foreign currency reserves in India were strained. As a result, the Indian government created and printed "Gulf Rupees," a currency on par with the Indian Rupee but for exclusive circulation outside the country. On June 6, 1966 the Indian government devalued the Gulf Rupee against the Indian Rupee.Read the Entire Article