44 years since the dirham became the UAE’s currency of choice

It is 44 years ago on Friday that these first banknotes were issued and the UAE dirham launched to replace the array of currencies that had been used across the various emirates.

Ram Kumar, founder of Numisbing, a company that deals in old banknotes, in Deira, Dubai. Christopher Pike / The National

When a young desert nation announced its own currency it sent a message to the world that it was confident of its people, economy and future – now those first Emirati banknotes are collectors’ items.

Printed in an array of colours, the first UAE banknotes showed everything from a tranquil harbour to an imposing fort.

It is 44 years ago on Friday that these first banknotes were issued and the UAE dirham was launched to replace the currencies that had been used across the various emirates.

Produced initially in denominations of Dh1, 5, 10, 50 and 100, these notes were joined three years later by a dark blue Dh1,000 bill to complete the set.

Such first issue notes have long since ceased to circulate in the nation’s shops, having been replaced gradually from 1980 by a set of banknotes that have since remained largely unchanged.

But although no longer used, the original banknotes are far from forgotten: they are coveted by collectors and pristine examples can change hands for tens of thousands of dirhams.

“The first issue notes are available only with collectors or some old people who keep them as remembrance of their early days,” said Ram Kumar, 37, the founder of Numisbing, a dealer in collectable notes and coins based in Deira, Dubai.

“No [shops] accept these notes. They’re just historical items … [but] they have a much higher value than their face value.”

Until the first dirhams were issued in 1973, several currencies were used locally. From 1959, a special Gulf issue of the Indian rupee was in circulation in what were then the Trucial States. Dubai and Qatar later joined forces to launch the Qatar and Dubai riyal, while other emirates used currencies issued elsewhere in the Gulf.

The then newly-founded UAE Currency Board’s launch of the dirham on May 19, 1973, coming less than two years after the UAE was founded, represented another key step in the building of the nation.

As with today’s notes, the first UAE banknotes had Arabic lettering on the front and English on the back, with the reverse displaying landmarks from different emirates.

The Dh1 note showed a clock tower and police fort in Sharjah; Dh5 featured Al Bithnah Fort in Fujairah; Dh10 showed Umm Al Quwain from the air; Dh50 the Ruler’s palace in Ajman; and Dh100 a harbour in Ras Al Khaimah. The later Dh1,000 note featured forts from Abu Dhabi and Dubai.

In 1980 the UAE Central Bank replaced the Currency Board and these first issue notes were gradually withdrawn from circulation and replaced by the notes familiar today.

The first issue Dh1,000 note is among the most sought after, with prices starting at about Dh4,000. Very good examples sell for much more. “If the note is in brand new condition, the way it was produced, it will go up to Dh70,000 or Dh80,000. The collectors will pay a higher premium,” Mr Kumar said.

Among the UAE residents who collect notes is Anthony Godinho, 40, a sales manager from India who has lived in Dubai since 2002.

He has two sets of the original Dh1 to Dh1,000 notes in used condition and estimates that each set is worth between Dh8,000 and Dh9,000. He said the notes are appealing for their colours and the images of landmarks.

“I buy them individually. I never believe in buying sets. I like challenges. Anybody can buy a whole set but searching, getting to know people, finding who has it – I like these kinds of things,” he said.

Mr Godinho sometimes buys online, although he said better prices can often be found purchasing in person.

The best notes are often sold at auction, and there is a busy international market for such currency.

Barnaby Faull, director of banknotes at the London auctioneer Spink, said first issue UAE banknotes were “very much sought after”.

“The early ones are good because they didn’t make so many. To get anything from the Gulf in nice condition after 40 years is tricky,” he said.

Only last month Spink held a Treasures of the Arabian Gulf sale of banknotes, with some raising thousands of pounds. Perhaps appropriately, Mr Faull said most such notes were “going back to the Gulf”.