Bahraini Dinar (BHD)

What Is the BHD (Bahraini Dinar)?

The BHD is the symbol for the Bahraini dinar, which is the official currency for Bahrain, an island nation in the Arabian Gulf near Saudi Arabia.

The BHD is pegged to the U.S. dollar at a rate of 2.659:1.

Understanding the Bahraini Dinar

The BHD (Bahraini dinar) is made up of 1,000 fulūs, which is plural for fils, and often uses the symbol BD when trading. It is a highly valued currency and is officially pegged to the U.S. dollar at a rate of 1 BD = 2.659 USD. The name dinar comes from the Roman denarius, which was the original standard silver coin used as currency during Roman times from 211 BC to around 244 BC.

Before 1965, Bahrain used the Persian Gulf rupee as their currency. Bahraini dinars began circulation in 1965 and replaced the Persian Gulf rupee at a conversion rate of one dinar to 10 rupees. Until 1973, the Bahrain Currency Board issued banknotes. After 1973, this responsibility fell under the control of the Bahrain Monetary Agency. 

In 1980, the dinar begin pegging to IMF’s Special Drawing Rights (SDR), with a fixed rate of 0.376 dinars to $1 USD. There has been volatility, mainly due to the instability in the region, but the peg has been maintained. By 2006, the Bahrain Agency transitioned and was renamed the official Central Bank of Bahrain (CBB). The CBB oversees both conventional and Islamic banks. They also have oversight of insurance, investment firms, brokers, and other financial institutions.

The Bahrain dinar banknotes have denominations of 0.5, 1, 5, 10, and 20 dinars. The country also has coins valued at 1, 5, 10, 25, 50, and 100fulūs. The Central Bank of Bahrain manages the currency. Beginning in 2016, the Bahrain dinar began circulation of notes with enhanced security features. The new notes also have raised lines to assist the visually impaired.

Bahrain's Economy

Throughout the 1980s and '90s, the country of Bahrain was becoming more economically stable, after having implemented changes at a developmental level. By 2008, the Central Bank of Bahrain launched a new group of banknotes, which were technically its fourth official series of notes. This new issue honored both the bright future of Bahraini and reflected upon its past heritage. 

Although the country has struggled economically, without an agricultural industry and high rates of unemployment, it is still rated as the fastest-growing economy of the Arab countries. According to World Bank data as of 2020, the country posted a 3% annual inflation rate and has a gross domestic product (GDP) growth of 2.1% through 2021.