In between 1959- 1966, a special kind of currency was in use in the countries of Arabian Peninsula and Persian Gulf. This currency was known as the Gulf rupee or the Persian Gulf rupee. This currency was issue by the Indian Government and the Reserve Bank of India and was equal to the Indian mainland rupee. The serial number of the notes was usually starts with a ' Z ' alphabet.

At the beginning of the 20th century, the Indian rupee was used extensively as the legal tender in the countries of the Arabian Peninsula and the Persian Gulf. To diminish the burden put on India’s foreign reserves by gold smuggling by this extraneous use of rupee, an individual currency was created. The Government of India launched the Gulf rupee in 1959 as a substitute for the Indian rupee. This currency was introduced exclusively for circulation outside the country. Indian Government devalued the Gulf rupee on 6 June 1966 after many countries in that region has come up with their own legal tender.