What is the Oman Rial (OMR)?
OMR is the currency code for the Omani rial. Oman is a country located in the southeastern coast of the Arabian Peninsula. The OMR is the national currency of the Sultanate of Oman. The Omani rial is made up of 1000 baisa. The Central Bank of Oman pegs the value of the Omani rial at $2.6008.
Circulation of the OMR is in banknotes and coins. Banknote denominations are 100 and 200 baisas, and 1/2, one, five, 10, 20, and 50 rials. Coins have denominations of 5, 10, 25, 50, 100 baisas, and 1/4 and 1/2 rials.
- The Omani rial uses currency code OMR, and is the currency of the Sultanate of Oman.
- The OMR is pegged at 1 rial to US$2.6008.
- Oman is heavily dependent on oil exports and is attempting to diversify its economy.
Understanding the Oman Rial (OMR)
The Central Bank of Oman pegs the value of the Omani rial to the U.S. dollar (USD) at a fixed exchange rate. Between 1973 and 1985 the rate held at 1 rial to $2.895 but changed to $2.6008 in 1986. The dollar peg keeps the value of the rial stable and protects against the volatility which small, trade-and-resource-based economies like Oman’s can experience.
Oman is heavily dependent on oil, making the economy and the currency heavily influenced by the price of oil. Like many oil-rich nations, Oman is attempting to diversify its economy away from dependence on oil. Omani officials are directing particular attention to manufacturing, tourism, and logistics, given its coastal geography at a critical crossroads of the world.
Until Oman can achieve a more diversified economy, with a more developed financial system, it is likely that the Omani rial will remain pegged to the dollar.
According to World Bank data, Oman's population is growing between 4.7% and 6.9% per year between 2010 and 2017. The country has seen significant swings in inflation, some years being up double digits and other years being down close to double digits. Gross domestic product (GDP) has grown at a rate of 4.7% in 2015, 5% in 2016, and -0.9% in 2017.
History of the Omani Rial
Oman sits on the Strait of Hormuz at the Persian Gulf and has is key to stability in the region. Before 1970, Oman did not have a national currency. Earlier, the area, then known as Muscat and Oman, used the Indian rupee (INR) and the Maria Theresa thaler with the currencies seeing circulation in different regions.
Beginning in 1970, the OMR was known as the rial Saidi and had a value equal to the British pound (GBP). This currency became popular and replaced the Indian rupee in coastal regions. By 1973 the currency was replaced by rial Omani (at par) and became the predominant form of money. OMR became the currency of Oman after Sultan Qaboos bin Said officially changed the name of the country to the Sultanate of Oman.
The most notable development in the history of the Omani Rial happens in 1970. At this time, Sultan Qaboos bin Said assumed power after overthrowing and exiling his father Sultan Said bin Taimur. The change in leadership followed a palace coup.
Qaboos bin Said after that embarked on a program of economic and social reform. His reforms included the establishment of a national currency and the establishment of the Central Bank of Oman in 1974. The central bank issues and manages the Omani rial.
The Omani rial remains pegged to the USD at a rate of one rial per $2.6008 as of June 2019.
Real World Example of Omani Rial (OMR) Currency Fluctuations
The exchange rate of OMR versus the USD (OMR/USD) is subject to very little fluctuation since the rate is pegged at $2.6008 per rial. The rate against other currencies will fluctuate though since the OMR is not pegged to those currencies.
Assume a traveler is looking up rates for traveling to Oman from Canada. They are interested in the OMR/CAD rate, which is how many Canadian dollars (CAD) it takes to buy one OMR.
In 2014 the traveler could have gotten a rate around 2.80, which means it costs C$2.80 (Candian dollars) per rial. In early 2016 the rate rose above C$3.70. It cost more CAD to buy one OMR, which means the OMR appreciated or the CAD depreciated against the OMR.
2016 through 2018 saw the rate stabilize between those lows and highs, staying largely between C$3.50 and C$3.10. As the rate dropped from C$3.70 to C$3.10, the OMR was depreciating against the CAD, or the CAD was appreciating against the OMR, because it was costing less CAD to buy one OMR.