For nearly a quarter of a century, Qatari citizens have woken up each morning to the exchange rate of their national currency against the dollar, steady as a straight line and unaffected by global market fluctuations.
This exchange rate stability would not have been possible without the Qatar Central Bank’s adoption, since July 2001, of a fixed exchange rate policy pegging the Qatari riyal to the US dollar at a rate of 3.64. This means approximately 3.64 riyals equal one dollar.
As stated in Article (1) of Decree No. (34) of 2001, “The exchange rate of the Qatari riyal against the US dollar shall be fixed at (3.64), whereby the Qatar Central Bank shall buy one dollar at a rate not exceeding (3.6385) Qatari riyals and sell one dollar at a rate not exceeding (3.6415) Qatari riyals to banks operating in the state.”
According to Law No. 13 of 2012 regarding the Qatar Central Bank and the regulation of financial institutions, Articles 49, 50, 51, and 52, the state’s currency unit is the Qatari Riyal, which is divided into 100 dirhams. The issuance of currency is an exclusive privilege of the state, and only the Central Bank has the authority to exercise this right.
For this purpose, it has the authority to take the necessary measures for printing banknotes and minting coins, including the design of banknotes and coins, as well as the moulds for printing banknotes and minting coins, and to store them securely. It also oversees the issuance, reissuance, redemption, and withdrawal of currency from circulation and the exchange of currency through the central bank’s main office, its branches, or through banks, agencies, and offices it establishes or designates.
“The currency issued by the Bank shall be a tool for paying any amount in the State, provided that this amount shall not exceed the nominal value of the currency”. Additionally, “the Bank shall determine the categories, forms and designs of banknotes and coins, which the Emir shall approve. Banknotes shall bear the signature of the Minister and the Governor.”
Known for its stronghold on past, present, and future, Qatar has had its fair share of jumping the ships with the Gulf Rupee and Dubai-Qatar Dirham and finally adopting and now nourishing the Qatari Riyal, as cited under the heading “currency gallery in the history of banknotes” on the Qatar Central Bank website.
In our quest to find true stories and facts about what led to the present-day circumstances, we interviewed some veterans. So, let’s dive into history and try to understand the situations that led to the consequent leap.
Qatar’s tryst with Destiny in 1940’s-60’s
In the 1900s, Qatar was mainly known for pearl diving, camel trading, and horse rearing; for many, pearl diving was their means of livelihood.
In his paper Pearl Diving: Inside the trade that shaped the Gulf, Martin Woodward, an archival specialist with the British Library, says, “Pearl fishing was for centuries the main industry in the Persian Gulf region.”
The World Archaeology site’s article Qatar, Pearl Divers says, “The Arabian Gulf boasts many more natural resources than oil and gas. The seas that lapped its coasts were once one of the world’s main locations for oyster pearls. Owing to an insatiable international appetite for pearls, from the mid-18th until the beginning of the 20th century AD, thousands of people in the Arabian Gulf were involved in the pearling industry. This led to the foundation of new towns and drove a thriving import and export economy.”
I met Saad Ibrahim Al-Jassim, an 88-year-old Qatari pearl diver, who often sits in his well-lit shop in Souq Waqif, surrounded by marine and freshwater pearls. He is known as the “Old Diver” and “Bahlaween” (meaning a bodybuilding champion).
Al-Jassim is roughly 5’6’’ and is clad in the traditional Qatari white colour thobe and checkered red and white keffiyeh. The shop is cozy with the aesthetics of pearls and a basket made of net hanging from the ceiling, it smells faintly of Oud Bakhoor. Old age seems to defy Ibrahim as he narrates the past incidents impeccably.
Al-Jassim is a local celebrity in Doha and is used to having videographers take his interviews. Amicably, he asks me, “Where is your camera? Will you not take videos of me?” To which I humbly reply, “Oh! I need it for print media, but I’ll take pictures.”
I watch Al-Jassim keenly as he places a big rock tied astutely with a rope and a clip on the table. He says, “I am a bodybuilder and a pearl diver. I used to lay on iron nails and broken glasses.”
He went on to talk about life on the boat during pearl diving, saying, “In the morning, we would eat a piece of date with Arabic coffee, and in the evening, we would have fish with rice cooked in date syrup, as it gave us energy and helped reduce thirst.”

When asked about the currency used, Ibrahim said, “We traded in Indian rupees. Our pearls went to India by sea, which took 10-15 days, and goods were brought from there.”
According to Jack E. Davis’s book The Gulf: The Making of an American Sea (1939), “An American oil company, Standard Oil of New Jersey (now ExxonMobil), discovered oil at Dukhan in Qatar. This discovery began a new era for the tiny peninsula, which had been primarily known for its pearl diving industry.”
The writer adds that the Second World War disruptions delayed the subsequent exploitation of Qatar’s oil resources. Commercial production did not begin until the late 1940s, setting the stage for a dramatic transformation of Qatar from a poor, sparsely populated country into one of the wealthiest nations in the world.
Oil Discovery in the 1940s
In the 1940s, oil wells were discovered in Dukhan. Twenty years later, in 1966, Qatar was laden with the dilemma of progress and how to maintain its roots. Engineers from around the world hovered over Qatar for help and material gain.
Souq Waqif is not only a market hub where traditions meet present developments but also has some great stories to narrate.
Situated in the Souq is the “Majlis Al Dama.” There, in search of some more evidence for the existence of the Indian rupee, I met Mohammad and Salem, aged between 60 and 65, who have seen Qatar develop from the start.
During their childhood, the Indian rupee was prevalent and was used from Kuwait to the Emirate. Reminiscing about the times spent with their elders, they “say, “Our” father” and grandfather used to go diving; they travelled without an engine boat and stayed four months in the sea. Times were uncertain; they would return if they got a big pearl; if not, they’d stay longer. The discovery of oil in the 1940s altered our life course, and we started working in companies.
Salem says the engineers were ushered in from Britain, India, and Pakistan, and they helped develop the oil refineries. According to reliable sources, Qatar started supplying oil to different countries in the late 1960s.
According to Salem, “Britishers were helping us discover the oil, and the rupee was very strong during that time. For 1 rupee, we used to buy fish, 1-2 kg of rice, and sugar.”
Salem continues, “Between 1966 and 1972, Qatar and Dubai introduced the Qatar-Dubai Riyal as a currency.”
Abandoning the Indian Rupee and Issuing the Qatar-Dubai Riyal
The world was witnessing significant changes as colonies demanded their rights. India gained its independence in 1947 and began building its economy from scratch. Between 1947 and 1966, India conflicted with Pakistan and China, and it faced severe famines and droughts, which led to a decline in its foreign reserves.
Discussions began regarding a request for assistance from the International Monetary Fund (IMF) and the World Bank, and the United States promised India $900 million over three years on the condition that the rupee be devalued.
After much discussion, a historic decision was made on June 5, 1966, to devalue the Indian rupee. According to the Reserve Bank of India archives, the Cabinet reduced the rupee’s value by 36.5% against gold and 57% against the dollar, the British pound, and the ruble.
Overnight, the exchange rate against the dollar changed from 4.76 rupees to 7.50 rupees per U.S. dollar. This was the first devaluation since September 1949 and the second in thirty years of independence.
This devaluation led to radical changes in the Gulf region, where the Indian Rupee was the primary currency. The Indian Rupee, or Gulf Rupee, was pegged to the British Pound at a rate of 13⅓ Indian Rupees to one British Pound. However, after the rupee was devalued in 1966, Gulf Arab countries began adopting their currencies.
According to archival data available on the Qatar Central Bank website, the State of Qatar decided in September 1966 to “establish the Qatar and Dubai Currency Board, which was tasked with issuing a new currency called the Qatar-Dubai Riyal. This currency entered circulation in September 1966 and continued to circulate until the establishment of the United Arab Emirates and the accession of Dubai to it. In 1973, the UAE issued a new currency called the UAE Dirham, which led to the liquidation of the Qatar and Dubai Currency Board and the transfer of its assets and liabilities to the Qatar Monetary Agency. A law was issued to establish the agency following the provisions of Law No. (7) issued in 1973, and for the first time, Qatari currency was issued, with the Qatari Riyal being the currency unit at that time.”

Qatar’s Gradual Growth Towards Stability
The above period was significant, representing Qatar’s gradual economic autonomy from British influence. Establishing the Qatar-Dubai riyal set the stage for the country’s financial independence. With the increased oil revenues, Qatar began investing in infrastructure and social services, laying the groundwork for its future wealth.
In 1973, shortly after gaining complete independence from Britain in 1971, Qatar introduced its currency, the Qatari riyal (QAR), replacing the Qatar-Dubai riyal. Establishing the Qatari riyal marked the country’s full autonomy over its financial and economic policies. This new currency symbolized the nation’s identity and the beginning of a new era fueled by Qatar’s vast oil and gas resources.
Oil and gas discoveries transformed Qatar’s economy, and the Qatari riyal became associated with one of the fastest-growing economies in the world. By the late 20th century, Qatar had emerged as a wealthy nation, and the Qatari riyal gained stability and purchasing power, symbolising the country’s new economic stature.
In the words of Alam, who is Pahlwan’s apprentice, hails from South Asia and is in his early 40’s says “I have been in Doha for 23 years and I have seen it developing.”
He says the exchange rate when he came to Doha was 1 QAR to 12 Indian rupees, which, at the time of writing this article, was 1 QAR to 23.18 Indian Rupees.
He feels inflation has hit every country: “Earlier, we used to get rice basmati for 10 QAR, but today we get it for 30 QAR.”
Sitting in Pahlwan’s shop for over a decade, Alam feels, “Today Qatar has become the hub for tourists, while every minute I see Europeans flocking the place. Asians who came earlier as labourers today visit as tourists. Almost all the delegations come here.”
In his closing remarks, Alam says, “At the time I came, oil and gas were booming. I used to see two towers in Corniche and City Centre had opened just six months ago. There was only Sheraton and just one Lulu Center near Landmark, and Souq Waqif was revamped some 17 years ago.”
The 2022 FIFA World Cup marked a pivotal moment in Qatar’s history on the global stage. As the first Arab country to host this event, Qatar invested billions of dollars in infrastructure projects, highlighting the strength of the Qatari Riyal and the country’s commitment to diversifying its sources of income beyond oil and gas.
Mahan Kamrava says in his book Qatar: Small State, Big Politics (2013), “The 2022 World Cup was a pivotal event not only in sports but also in the history and economy of Qatar. The country’s economy, heavily relying on oil and gas revenues, experienced a significant shift towards service industries, particularly tourism, hospitality, and architecture. The tournament stimulated the development of massive infrastructure projects, including new stadiums, roads, airports, and luxury hotels, creating job opportunities and attracting foreign investments. Hosting the tournament enhanced Qatar’s global image and paved the way for its long-term economic transformation, making it a regional power in the tourism and hospitality sectors.”
The Future of the Qatari Riyal and Qatar’s Economy
Looking to the future, the Qatari Riyal will continue to play a vital role in representing the nation’s economic aspirations. Qatar remains one of the world’s highest-income countries per capita and aims to enhance its economy’s diversification further.
As mentioned in an article by Oxford Business Group titled Social, Economic, Environmental Changes and Diversification in Qatar, “The Qatari riyal is pegged to the US dollar at the nominal rate of 3.64 riyals per dollar, with this peg implemented by the Qatar Central Bank, the country’s central financial institution. Commercial banks in Qatar deal with the dollar at a 0.24% variance from the rate applied to the public and businesses, meaning this peg ensures the stability of the riyal against the dollar. It is a key priority for the Qatar Central Bank.”
The evolution of Qatar’s currency from the Indian rupee to the Qatari riyal mirrors the country’s journey from a small, pearling economy under British influence to a modern, independent nation with one of the highest per capita incomes globally. The Qatari riyal now embodies Qatar’s economic achievements and ambitions, symbolizing the wealth of a country that continues to evolve.
In Salem’s words, “Our nation provides many perks like free water, free education, and free health to the Qatari citizens; this is tough to find anywhere else in the world.”
Muhammad Butt was born and brought up in the UAE to expat parents and has recently shifted to Qatar. He is currently working in a document clearing services company.
He feels the Gulf states are slowly gaining momentum and moving towards a stable future.