Bahraini Dinar: Everything You Need to Know About Bahrain’s Currency
Learn about the Bahraini Dinar, its denominations, value factors, exchange methods, and practical considerations for travelers and international transactions.
The Bahraini Dinar (BHD) is the official currency of Bahrain and one of the highest-valued currencies in the world. It plays a key role in the country’s economy, which relies on banking, finance, and oil production. With its fixed exchange rate, it remains stable and important for both residents and international investors.
Current Denominations
The Bahraini Dinar is available in banknotes and coins. The banknotes in circulation include ½, 1, 5, 10, and 20 dinars, featuring designs that highlight Bahrain’s cultural heritage, such as historical landmarks and symbols of economic progress. Security features like watermarks, color-shifting ink, and holographic strips help prevent counterfeiting.
Coins, known as fils, are used for smaller transactions and come in denominations of 5, 10, 25, 50, and 100 fils. Due to inflation, lower-value coins are less common, but the 100-fils coin remains widely used, especially for small purchases and public transportation. Older coins were primarily bronze, while newer ones use nickel-plated steel for durability.
Factors Influencing Its Value
The Bahraini Dinar is pegged to the U.S. dollar at a fixed rate of 1 BHD = 2.659 USD. This peg provides stability, preventing currency fluctuations. The Central Bank of Bahrain (CBB) maintains this rate by managing foreign exchange reserves and adjusting liquidity.
Oil revenue plays a major role in supporting the dinar’s value. As a key part of Bahrain’s GDP, oil exports bring in foreign currency, strengthening reserves. When oil prices rise, Bahrain benefits from increased revenue, while prolonged declines can strain reserves, requiring fiscal adjustments or external borrowing.
Government debt and fiscal policy impact confidence in the dinar. Bahrain has a high debt-to-GDP ratio compared to other Gulf nations, requiring careful financial management. Credit ratings from agencies like Moody’s and S&P influence investor perception, with downgrades potentially increasing borrowing costs. To reduce reliance on oil, Bahrain is expanding sectors like banking and tourism to achieve long-term stability.
Methods to Acquire or Convert
Exchanging currency in Bahrain is straightforward, with banks, exchange houses, and airport kiosks offering conversion services. Licensed exchange houses in commercial districts often provide better rates than airport counters, which charge higher fees. Many outlets operate seven days a week to accommodate Bahrain’s active financial sector.
For international transactions, online currency exchange platforms and fintech services offer an alternative to traditional methods. Companies like Wise and Revolut allow users to convert money at interbank rates, often with lower fees than banks. These services are useful for expatriates and businesses handling cross-border payments, offering transparency and faster processing.
ATMs in Bahrain accept foreign debit and credit cards, dispensing dinars at exchange rates set by the card network. However, transaction fees may apply, including withdrawal charges from both the local bank and the card issuer. Some ATMs offer dynamic currency conversion, allowing withdrawals in the cardholder’s home currency, but this option often comes with unfavorable rates.
Travel and Cross-Border Usage
The Bahraini Dinar is widely accepted within Bahrain but rarely used beyond its borders. In neighboring Gulf Cooperation Council (GCC) countries, particularly Saudi Arabia, the Saudi Riyal (SAR) is the primary currency. However, many businesses near the King Fahd Causeway accept riyals at a fixed rate of 1 BHD = 10 SAR, though unofficial exchange rates may vary.
For travelers leaving the GCC, converting dinars before departure is recommended, as foreign banks and exchange counters outside the region may not carry BHD. Dubai is one of the few exceptions where BHD can sometimes be exchanged directly. Credit and debit cards remain the most convenient payment method for international travel, with Bahraini-issued Visa and Mastercard widely accepted abroad, though foreign transaction fees may apply.