QAR denotes the currency code for the Qatari riyal, the official currency of the State of Qatar, located along the coast of the Arabian Peninsula. Comprising 100 dirhams per riyal, the currency is abbreviated as QR in English. Riyal may also be spelled as ‘rial’. All Qatari notes and coins are issued by the Qatar Central Bank, tasked with ensuring monetary stability and regulatory oversight.
Key Insights
- The Qatari riyal is the currency of the State of Qatar. The currency code is QAR, and the abbreviation is QR.
- Pegged to the USD at a rate of 1 USD/QAR 3.64, the QAR fluctuates within a small band between 3.6385 and 3.6415.
- The Qatar Central Bank controls the issuance and regulation of the currency to maintain the peg.
- Despite brief fluctuations (such as in 2017 during a diplomatic crisis), the peg has been largely stable.
- Qatar’s currency includes denominations of one, five, ten, fifty, one hundred, and five hundred riyals in banknotes, and one, five, ten, twenty-five, and fifty dirhams in coins.
Understanding the Qatari Riyal (QAR)
The Qatari riyal replaced the Qatar and Dubai riyal in 1973 when Dubai joined the United Arab Emirates (UAE), prompting Qatar’s independent issuance of its currency. Prior to the Qatar and Dubai riyal, the Indian rupee was in use but was replaced in 1966 following its devaluation.
The riyal is pegged to the U.S. dollar (USD) at 3.64 QAR per USD, formally established by Royal Decree in 2001. This decree mandates that the currency is maintained within a band of 3.6385 to 3.6415 QAR per USD.
Given Qatar’s highly commodities-dependent economy (notably oil and natural gas), pegging the QAR to the USD mitigates potential economic volatility since these commodities are priced in USD. The oil and gas industry constitutes a significant portion of Qatar’s gross domestic product (GDP).
Currency Fluctuation Events
In 2017, the Qatari riyal experienced notable fluctuation in offshore markets, precipitated by a diplomatic rift. Some foreign countries halted transactions with Qatari banks, leading to a liquidity shortfall which pushed the QAR’s value to 3.81 in certain foreign markets.
This diplomatic crisis arose when several countries severed ties with Qatar over allegations of terrorism support but was resolved in January 2021 with a
Related Terms: Currency Peg, Foreign Exchange, Middle Eastern Currency.
References
- Oanda. “Qatari Rial”.
- Reuters. “Qatar Riyal Quoted Below Peg but No Threat of Devaluation, Bankers Say”.
- Ministry of Foreign Affairs. Qatar. “Oil and Gas Sector”.
- S&P Global Market Intelligence. “Qatari Banks Face Liquidity, Profitability Challenges as Crisis Drags On”.
- BBC. “Qatar Crisis: What You Need to Know”.
- Aljazeera. “Saudi FM: Full Ties Restored Between Qatar and Blockading Nations”.
- The World Bank. “GDP (Current US$) - Qatar”.
