A modern-style coinage was introduced into circulation in 1963, following the establishment of the Yemen Arab Republic.

Denominations issued by the Yemen Arab Republic ceased to be legal tender afterward.

Gold coins denominated in guineas were also minted, primarily for presentation purposes.

In 1962, the Arab Republic first issued bronze 1⁄2 and 1 buqsha, 1⁄20, 1⁄10, 2⁄10 and 1⁄4 rial in a similar style to those of the last king.

In 1964, the government introduced North Yemen's first paper money, which consisted of 1, 5, and 10 rial notes.