The Jordanian dinar is the national currency of the Hasemite Kingdom of Jordan. As such, it sees a fair amount of use in the West Bank as well, which makes sense for historical as well as practical reasons. Besides this, there are some people who might be familiar with the Jordanian dinar because it is one of the most expensive currencies that can be found in the entire world.
How Did the Jordanian Dinar Come Into Existence?
The Jordanian dinar came into existence because of the First and Second World Wars. However, it can be said that it retains influences from much, much older periods of history. For instance, the very term “dinar” comes from the Roman denarius. For those who are unfamiliar, the Roman denarius was a silver coin that was issued by the Roman Republic and then the Roman Empire. As a result, when the Romans carved out an empire for themselves that stretched from Britain to Mesopotamia, the Roman denarius became one of the most used and thus most influential coins ever created. Even now, even though the last remnant of the Roman Empire ended in 1453 with the Fall of Constantinople, this influence can still be seen in a wide range of contexts, as shown by how the Italian, Spanish, and Portuguese words for “money” are denaro, dinero, and dinheiro.
The Romans had a huge impact on the Arab world as well. This intensified following the formation of the Caliphate, seeing as how Islam rose in the wake of a catastrophic series of conflicts between the continuation of the Eastern Roman Empire and the Sasanian Empire of Iran. As a result, the Caliphate incorporated a fair number of Roman influences, which it would pass on to a wide range of cultures in turn. The single most relevant example in this particular case would be the Caliphate’s dinar, which was gold rather than silver but has nonetheless proven its influence by inspiring the names for numerous currencies in the present time.
Having said that, the creation of the Jordanian dinar is connected with the creation of the Hashemite Kingdom of Jordan itself. In short, one of the regions controlled by the Ottoman Empire was the Levant. However, the longstanding tensions towards Ottoman authorities resulted in the Arab Revolt in 1916, which received the agreement of the United Kingdom to support Arab independence. The Arab Revolt emerged victorious, but said agreement was never fulfilled, as shown by how both the United Kingdom and France proceeded to partition Ottoman territories in the wake of the First World War on terms that were perceived as being unfavorable for the locals. In fact, the partition was so unnatural that a fair number of people believe that the entire point was to create crisis points for the purpose of ensuring local infighting, thus necessitating the continuing involvement of western powers as arms dealers as well as peacebrokers. Somthing that became particularly popular following the U.S. involvement in Iraq in recent times.
In any case, one of the resulting regions was the British Mandate for Palestine. Said region had a currency called the Palestine pound that could be divided up on a decimal basis. Something that reflected a British proposal for the pound sterling that was never used for said currency but would go on to see use in the Jordanian dinar. This is because while the Palestine pound was issued for the British Mandate for Palestine, it saw use in what would become Jordan as well because of a series of events that resulted in Abdullah bin Hussein at the head of an autonomous government under the auspices of the British Mandate for Palestine. Eventually, Jordan became an independent country in 1946, which was followed by the start of an effort to introduce its own national currency. This resulted in the creation of the Jordanian dinar in July of 1950, which was followed by the dropping of the Palestine pound soon afterwards.
Why Is the Jordanian Dinar Such an Expensive Currency?
As for why the Jordanian dinar is such an expensive currency, the answer is that the Jordanian government maintains fixed exchange rates. Technically, the Jordanian dinar is pegged to the special drawing rights of the IMF. However, in more practical terms, the Jordanian dinar is pegged to the U.S. dollar at around 1 U.S. dollar to 0.709 Jordanian dinars most of the time. Due to this, the exchange rates of the Jordanian dinar don’t change as much as what people used to floating exchange rates might expect, thus providing the currency with a considerable measure of stability.
In other words, the high value of the Jordanian currency isn’t a product of the uncontrolled interaction of demand and supply. Instead, it is the product of tighter government policy than what is seen in countries that lean more towards floating exchange rates. Having said that, an argument can be made that this is a sign of the economic capabilities of Jordan, seeing as how fixed exchange rates require government to put in constant effort. In that regard, Jordan does quite well, seeing as how it is regarded as an upper middle income country with one of the freest economies in the Arab world, beaten out by just Bahrain and Qatar. Moreover, Jordan is interesting in that it lacks the oil resources owned by its neighbors, meaning that it doesn’t suffer from the problem of being over-reliant on a single economic sector. However, this comes with challenges of its own since this means that Jordan must import oil for its energy needs. Something that can be very expensive in times when oil prices see a surge.
In any case, interested individuals should look more into the Jordanian dinar on their own to get a better understanding of the national currency for whatever reason that they are interested in. By doing so, they should be able to maximize their chances of getting whatever results are best for their particular interests.