Colony of Aden - Monetary System in Aden

Monetary System in Aden

Being an extension of British India, the Indian Rupee was the currency of Aden until shortly after India gained independence in 1947. In 1951, the rupee was replaced by the East African shilling which was on par with the shilling sterling. Then with the advent of the South Arabian Federation, a new South Arabian dinar was introduced in 1965 which was on par with the pound sterling. The South Arabian dinar was a decimal unit divided into fils.

Aden became independent as the South Yemen on 30 November 1967 without joining the British Commonwealth, but the South Arabian dinar continued at the one to one parity with sterling until 1972. In June 1972, the British Prime Minister Edward Heath unilaterally reduced the sterling area to include only the United Kingdom, the Isle of Man, the Channel Islands and Ireland (and Gibraltar the following year).

The South Yemen reciprocated immediately by introducing its own exchange controls and ending the fixed peg to sterling. South Yemen was still however listed in British law as being part of the overseas sterling area, that being a list of scheduled territories which continued to enjoy some exchange control privileges with the United Kingdom right up until 1979 when Margaret Thatcher abolished all United Kingdom exchange controls. See British currency in the Middle East.