the indian government introduced the gulf rupee, also known as the persian gulf rupee (xpgr), as a replacement for the indian rupee for circulation exclusively outside the country with the reserve bank of india [amendment] act, 1 may 1959. this creation of a separate currency was an attempt to reduce the strain put on india's foreign reserves by gold smuggling. after india devalued the rupee on 6 june 1966, those countries still using it – oman, qatar, and the trucial states (which became the united arab emirates in 1971) – replaced the gulf rupee with their own currencies. kuwait and bahrain had already done so in 1961 and 1965 respectively.