Being the world’s 3rd highest valued currency and the official currency of the Sultanate of Oman, the Omani Rial was introduced in the year 1973, replacing the Saudi Riyal. The change came in courtesy to the change in the regime and was followed by a change of the country name thereafter. In 1970, the OMR (then known as Rial Saidi) had a value equal to the British pound (GBP) and was a popular currency that replaced the Indian rupee in coastal regions. OMR (Omani Rial) is made up of 1000 Baisa. This currency is issued by the chief bank of this region – The Central Bank of Oman. In 1986, Oman created a fixed exchange rate and established a .38 Omani Rial peg to the U.S. dollar.

Some facts that you ought to know about the omani:

1. The short name for Omani currency is OMR.
2. The maximum used coins are 5 Baisa, 10 Baisa, 25 Baisa, 50 Baisa.
3. The most frequently used banknotes are 100 Baisa, 200 Baisa, 0.5 Rial, 1 Rial, 5 Rials, 10 Rials, 20 Rials, 50 Rials.

History of Omani Riyal

Located on the Southern coast of the Arabian Peninsula, Oman is an important Islamic country and so is its currency - the Omani Riyal. Omani Riyal is represented as OMR and was introduced in the year 1970 replacing the Indian rupee in transactions. The currency was initially introduced on a trial basis and was known as Rial Saidi. The currency gradually adapted to the financial world and started to gain significance. By the year 1973, it was officially called the Omani Riyal and became the currency of Oman. Qaboos Bin Said is the name behind the introduction of the currency and the revival of Oman’s economy. During the early 1970s, OMR saw major changes and emerged as a leading currency in the world.

In the initial years, Indian Rupee and Maria Theresa were the main currencies used for transactions in Oman. In the early 1940s, coins were introduced for the first time in Oman and were denominated as Baisa. Baisa had a rate of 200 Baisa = 1 Rial. Following this, the Rial Saidi was introduced replacing all other currencies in Oman. The Saudi Riyal was equivalent to the British Pound and replaced the Gulf Rupee at a rate of 21 Rupees = 1 Rial. Finally, in the year 1973, Omani Riyal was brought into the financial system.

The Omani Riyal has seen major shifts in its value as it is affected majorly by its location. Since the discovery of oil in 1964, Oman has emerged as a country of great value. By the year 1967, oil production began and with the introduction of OMR, the value kept increasing. The major jump in the value of OMR came after mid-2002 when oil production was at its peak. Presently, OMR is pegged against the US dollar at a fixed rate by the Central Bank of Oman. The rate is pegged at $2.6008 per Riyal. This helps to maintain stability for the OMR. However, the rate keeps fluctuating in terms of other currencies.

The OMR is available in different denominations for transactions. Banknotes denominations are 100 and 200 Baisas, and 1/2, 1, 5, 10, 20, and 50 rials. Coins are available in 5, 10, 25, 50, and 100 Baisas, and 1/4 and 1/2 rials denominations. Introduced by the then king, Sultan Qaboos, all the banknotes and coins have his images portrayed on the front side of the currency.

Factors Affecting the Exchange Rate of Omani Riyal

Omani Riyal has been pegged to the US Dollar and currently, there are no near expectations of lifting the pegging of the Riyal to the Dollar. So, for the US Dollar, the exchange rate of the Riyal is not expected to fluctuate much and stays fixed at 2.6008 Dollars per Riyal. However, for other currencies than the US Dollar, the exchange rate fluctuates. Let's see what impacts the value of the Omani Riyal in the global markets and what makes it an appreciating currency:

1. Oil prices:

The current economy of Oman is highly dependent on oil prices globally. It is one of the leading oil producers and hence, the international trade of oil makes a good profit for the country. Altogether, it helps in raising the exchange rate of the Omani Riyal against other international currencies. However, high dependence on oil is a matter of discussion in the country and Oman is planning to bring in other sectors of the economy under trading to diversify its international profits. Oil may not remain a highly demanding commodity today since the world is moving towards alternatives to oil. So, like other oil-producing countries, Oman is also trying to diversify its trading sector.

2. Exchange rate of US Dollar:

OMR is pegged to the US Dollar and so, the exchange rate of the US Dollar affects the exchange rate of OMR. The rate of exchange of the US Dollar with other currencies of the world changes every now and then, with some being pegged to the US Dollar and some fluctuating on a daily basis. All these in turn also impact the exchange rate of the Omani Riyal since it is also pegged to the US Dollar.

Oil has a significant role in the economy of Oman and so it also has a major impact on the exchange rate of the OMR. Other than the factors mentioned above, the foreign reserve of the country, the price of Omani exports, interest and inflation rate, etc. also affect the exchange rate of the currency. Soon, it is expected that the Omani tourism, logistics, and manufacturing sectors will be expanded to diversify the international trading of Oman.