Money Supply and Currency

Abstract

In the Middle Ages, Arab-Muslims inherited the massive coin stocks struck by Byzantium and Iran to support their war efforts in the sixth and early seventh centuries. Up to the late seventh century, solidi and drachms continued to circulate, Arab-Muslims making use of the available stocks. The situation changed from the reign of ‘Abd al-Malik (685–705) and the second fitna. With the rise of the ‘counter-caliph’ Ibn al-Zubayr, ‘Abd al-Malik felt the need to assert the Umayyad’s imperial authority to keep the unity of the umma. His famous reform of coinage was used to impose the Umayyads’ ideology through the use of new Islamic currencies. This chapter examines how Caliph ‘Abd al-Malik’s monetary reforms in the late seventh century played a fundamental role in triggering exchange and increasing the velocity of money circulation. It also explores how, in the late eighth, ninth, and tenth centuries, influxes of precious metal from the release of antique treasuries, the intensified exploitation of existing mines, and the discovery of ore veins and deposits in the Near East, Central Asia, and Africa, helped to sustain a developing culture of consumption.