A CONCISE HISTORY OF MONEY IN KUWAIT

If you were living in Kuwait hundreds of years ago you would find that Kuwaitis were
using different types of money. During the Abbasids we used the yellow brass Abbasid coins
made of yellow copper and also the silver Abbasid coins. In the 17th century we used different
types of money including the Ottoman Para, Ottoman gold lira, the Austrian Riyal (known in
Kuwait as the French Riyal), the Persian Dinar, the Omani Pisa, the Saudi coins (tawilat Al-
Hasa). After world war II, commercial transactions with India increased, the use of Indian Rupee
spread in Kuwait till independence. The Kuwaiti Dinar was first issued in Kuwait in 1961.
 
Before 1961, the authorities in Kuwait attempted to issue their own currency. In 1866
the Ruler of Kuwait, Shaikh Abdullah Al-Sabah II, ordered the minting of a copper coin, known
at that time as the Kuwaiti Paisa (you may still hear this name today). This money was minted
locally in Kuwait. There was another unsuccessful attempt in 1950 to issue a national currency
for Kuwait. The Kuwaiti Currency law in accordance with the Amiri decree no. (41) was passed
in October 1960. It stipulated that the Kuwaiti Dinar shall be the national monetary unit. The
law also stipulated the establishment of the Kuwaiti Currency Board to control the issuance of
the new currency. On the first day of its introduction, the Kuwaiti Dinar replaced the Indian
banknotes and coins.

.The Amiri Decree Law No. (41) of 1960 for the Kuwaiti currency

The Amiri decree law no. 41 issued on October 1960 stipulated the establishment
of the Kuwaiti currency and provided that the Currency Board shall establish a
currency reserve fund, the assets of which shall consist only of gold coins and
bullions, commercial bills in Sterling or in other foreign currencies convertible
into gold, in addition to bonds issued or guaranteed by foreign governments and
expressed in Sterling or in other foreign currencies convertible into gold.

The Decree law set the parity of the Dinar to 2.48828 grams of pure gold (note
the dollar was about 0.83 grams). The currency notes consist of five
denominations: KD 10, KD 5, KD 1, KD 0.5, KD 0.25 (note that we have now the
KD 20 notes, why?). The KD 20 was first issued in September 1984. Coins consist
of 6 denominations: 100 fils, 50 fils, 20 fils, 10 fils, 5 fils and 1 fils (note we do not
see the later today, why?).

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The Law no. 32 of 1968 (amended by law no. 130 of 1977)

Law no. 32 stated the establishment of the Central Bank of Kuwait to replace the
Kuwaiti Currency Board and to design and implement the monetary policy in
Kuwait. The amendment of the law states the cover of the Kuwaiti Dinar to
include:
 Gold coins or bullions
 Sight and time deposits in freely convertible currencies
 Foreign securities guaranteed by foreign governments or international or
monetary agencies
 Commercial papers expressed in freely convertible currencies
 Treasury bills and bonds guaranteed by the government of Kuwait
 Domestic commercial papers and loans and advances granted to local
banks

SPECIFICATIONS OF THE KUWAITI COINS

The following are the specifications of coins in different denominations

Denomination Standard weight Standard composition

100 fils 6.50 grammes 75% copper, 25% nickel
50 fils 4.50 grammes 75% copper, 25% nickel
20 fils 3.00 grammes 75% copper, 25% nickel
10 fils 3.75 grammes 78% copper, 1% nickel, 21% zinc
5 fils 2.50 grammes 78% copper, 1% nickel, 21% zinc
1 fils 2.00 grammes 78% copper, 1% nickel, 21% zinc

ISSUES OF THE KUWAITI CURRENCY

There are five issues of the Kuwaiti currency since independence in 1961.

First Issue 1961

Issued by Kuwait Currency Board to replace the Indian currency during the
reign of the late Sheikh Abdulla Al-Salem Al-Sabah. About 342 million Indian

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rupees were exchanged for about 25.6 million KD (i.e., at a rate of 13.33 Indian
rupees = 1 KD).

Photos are extracted from the excellent Central Bank of Kuwait Gallery on the internet:
http://www.cbk.gov.kw. I advise you all to visit it. It is very interesting

Second Issue 1970

Issued during the reign of the late Sheikh Sabah Al-Salem Al-Sabah, who
succeeded the late Sheikh Abdulla Al-Salem Al-Sabah. This issue was produced
by the Central Bank of Kuwait.

Third Issue 1980

Issued after accession of his highness Sheikh Jaber Al-Ahmed Al-Sabah, to be
used side by side with the second issue till February 1982 when the second issue
was withdrawn. Later in January 1986 the 20 KD currency notes were issued for
the first time.

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Fourth Issue
Issued after the liberation of Kuwait. It was effectively put into circulation on
March 24, 1991. this issue replaced the 3rd issue. The fourth issue was withdrawn
from circulation on August 17, 1994 and ceased to be a legal tender effectively on
February 16, 1995. These notes can still be exchanged at CBK until Monday,
August 16, 2004.

Fifth Issue
The fifth issue (current issue) is in circulation since April 3, 1994. The central
bank of Kuwait used the latest technology in the banknote printing industry. The
5th issue has some features that satisfy the highest possible levels of security for a
currency to be a legal tender. One such feature, unique to this issue, is the
hologram of a falcon's head on the 5, 10, 20 KD notes.

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 Source: http://www.cbk.gov.kw

As you will see later, the demand of the public in Kuwait for the 20 Dinar notes
increased substantially. Almost 60% of the total banknotes in Kuwait today are
20 Dinar notes. Do you think that the next issue will include 50 Dinar notes, and
Why?