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© 2022 World Population Review Privacy PolicyTermsContactAbout  See a trading opportunity? Open an account now! Register Now or Try Free Demo The United Nations recognizes 180 currencies in the world as legal tender. But while currencies such as the US dollar and the euro are popular and widely used, they do not hold the highest values, and they are not the strongest currencies. When we talk about the strength of a currency, this refers to the relative purchasing power of a national currency when it is traded for products or against other currencies. That is, currency strength is measured by the number of services and goods purchased and the sum of foreign currency received in exchange for one unit of the national currency. To determine the strength of a currency or if it is the most valuable currency in the world or the most expensive currency, we need to consider the interaction of a variety of local and international factors. This includes the supply and demand in the forex markets, inflation, growth in the domestic economy, the interest rates of the relevant central bank, and the country’s trade balance. Here are the top 10 currencies in the world in the order of their strengths (as of March 2022): 1. Kuwaiti Dinar (KWD)The Kuwaiti Dinar is the official currency of the state of Kuwait and is currently the strongest currency in the world. Kuwait is a small nation located between Saudi Arabia and Iraq on the Persian Gulf. Kuwait is considered one of the wealthiest nations on earth. It has rich oil reserves, with the commodity responsible for over 80% of the country’s GDP. Kuwait is also a tax-free nation and features one of the lowest unemployment rates in the world. The KWD was first introduced in circulation in 1961, replacing the Gulf rupee that was pegged at parity with the Indian rupee. KWD has been pegged to different currencies throughout its history, but it is currently pegged to an undisclosed basket of currencies. KWD is worth about $3.29. 2. Bahraini Dinar (BHD)The Bahraini Dinar is the official currency of Bahrain. It is pegged to the US dollar at the conversion rate of 1 BHD = $2.659. Like Kuwait, Bahrain is also located in the Persian Gulf, and its economy is heavily reliant on oil and gas. This industry supports over 85% of the kingdom’s revenues. The BHD was first introduced in 1965, replacing the Gulf rupee at 1 BHD = 10 rupees. Since 1980, Bahrain has pegged its currency to the IMF SDR. As a result, the BHD has maintained a relatively stable rate against the US dollar. It is important to note that Saudi Arabian Riyals are considered legal tender in Bahrain. The exchange rate is fixed at 1 BHD = 10 Riyals. 3. Omani Rial (OMR)The Omani Rial is the official currency of the Sultanate of Oman, a nation situated on the southeastern coast of the Arabian Peninsula. OMR was first introduced in 1970 as Saidi Rial (in honour of the ruling House of al-Said), and it replaced the Gulf rupee. The name was changed to Omani Rial in 1972. The OMR is pegged to the US dollar at $2.60. Oman first pegged its currency to the USD in 1973 at $2.895 but changed it to the current rate in 1986. As a small nation dependent on natural resources, the USD peg helps avoid severe currency fluctuations that may devastate the Oman economy. 4. Jordanian Dinar (JOD)The Jordanian Dinar is the official currency of Jordan. The JOD is also circulated in West Bank, a region located in Israel. The JOD was introduced in 1950, replacing the Palestinian pound, the official currency of the Emirate of Transjordan and Mandatory Palestine. The JOD is pegged to the US dollar at a fixed rate of $1.41. Unlike the above strong currencies, Jordan lacks natural resources. It is only classified as an emerging market economy dependent on fertilizer components, overseas remittances, foreign aid, and favourable trade agreements with regions like the USA, Canada, European Union, North Africa, and Southeast Asia. The JOD is only strong because of the USD peg rather than Jordan’s own economic power. 5. Pound Sterling (GBP)The pound sterling is the official currency of the United Kingdom, the British Overseas Territories, and the UK Crown Dependencies. GBP is the oldest currency in the world that is still in circulation today. The GBP is not only strong but also very influential in global trade and finance. It is the 4th most used currency globally, both in reserve and circulation, and it also forms part of the basket of IMF Special Drawing Rights. The GBP has a history as rich as the iconic British Empire, and it was once the most powerful currency in the world. It only lost that luxurious title in the 20th century when Britain became involved in two World wars, and the USA became a superpower. 6. Cayman Islands Dollar (KYD)The Cayman Islands dollar is the official currency of the Cayman Islands, which consists of Grand Cayman, Little Cayman, and Cayman Brac. Located in the western Caribbean Sea, the Cayman Islands is a ‘tax haven’ that has become a major global financial centre. The KYD has been pegged to the US dollar at the fixed rate of $1.2. Favourable or no taxes at all and the USD-peg have made the Cayman Islands a prestigious attraction for corporations and wealthy individuals. Furthermore, no taxes are applied on any income stored or earned within the jurisdiction. 7. Euro (EUR)The euro is the official currency of 19 states of the European Union. Introduced in 1999, the euro is one of the world’s youngest currencies. Nonetheless, the euro is now the 2nd most used currency globally, both in reserve and circulation. There are also about 25 countries that have pegged their national currencies to the common currency. As a region, the European Union is an influential political and economic player globally. The euro is not pegged to any other currency and freely floats in the market. As of March 2022, the euro exchanges for the US dollar at around the rate of $1.10 8. Swiss Franc (CHF)The Swiss franc is the official currency of Switzerland. It was introduced in 1850, replacing multiple differentiated currencies produced by the 13 Swiss confederates at the time. A robust and stable currency, the CHF has earned the title of a ‘safe haven’ currency. Switzerland is a politically stable country that has historically maintained a neutral stance in major military confrontations. The country also promotes sound fiscal and monetary policies and has witnessed stable economic growth over the years. The CHF is the 7th most traded currency globally, and at the time of writing, exchanges for the US dollar around at the rate of $0.93. 9. US Dollar (USD)The US dollar is the official currency of the United States of America and its territories. It was first introduced in 1792 and has risen to become the most powerful currency globally. The USD is the most used currency in the world, both in reserve and circulation. It is the ‘reserve currency of the world’ and dominates global trade and finance. Of all USD in circulation, only 30% is within the United States of America. To put the power of the US dollar into context, the top 4 strongest currencies in this list are USD-peg and 6 of the top 10. 10. Bahamian Dollar (BSD)The Bahamian dollar is the official of the Commonwealth of The Bahamas. The Bahamas dollar was introduced in 1966, replacing the Bahamas pound. The BSD is pegged to the USD on a par-to-par basis. The economy of The Bahamas is heavily reliant on international financial services and tourism. The country is also considered a ‘tax haven’ as it charges no tax on income stored and earned. Trade Strong Currencies with AvaTradeOpen an AvaTrade trading account and trade the strongest currencies in the world with ease and convenience. Here is why you should consider trading Forex with AvaTrade:
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Money makes the world go round, literally. It is the medium that facilitates global trade and is the principal measure of wealth. Currency has come a long way, from bartering to pieces of paper. The importance of exchange and value has been embedded in the intricacies of the world’s financial systems. From the beautiful landscapes of Switzerland to the Middle-Eastern dreamscapes of Gibraltar, these are the most valuable currencies in the world. Unsure of which currencies are the strongest? We’ll walk you through the strongest monetary units of various countries and what makes them so valuable. Highest-Ranking and Strongest World CurrenciesThe highest-ranking currencies of the world are usually determined by a variety of factors, such as interest rates and a country’s economic stability. Listed below are the strongest currencies currently available in the world. 15. Indian Rupee (INR)Conversion Rate: 1 INR = $0.014 The national currency of India, the Indian rupee is one of the lowest valued currencies on the list. Due to its flexible exchange rate, a number of factors have caused this currency to rise and fall. In 2016 one of these factors was identified as an increase in fake currencies being circulated. This caused India to set a demonetization in place that shocked the nation. 14. Japanese Yen (JPY)Conversion Rate: 1 JPY = $0.0091 Coming in as the third most traded currency in the world and the leading Asian traded currency is the Japanese Yen. Previously an extremely strong currency, the yen has become less valuable due to inflation. This currency is often used as a trading strategy, using its low interest rate to purchase foreign currency with higher interest rates. This is referred to as a carry trade that investors use to profit from a low-risk investment method. 13. Norwegian Krone (NOK)Conversion Rate: 1 NOK = $0.12 Rallying against the euro and other Scandinavian currencies, the Norwegian krone first launched in 1875. Norwegian banknotes feature designs celebrating the country’s maritime history. The current governing party intends to remove all paper money by 2030. Interestingly, the Norwegian krone is one of the rare currencies whose value can be set by global markets rather than the national economy. That’s largely due to the Norwegian Oil Fund, which is the largest sovereign wealth fund in the world. 12. Australian Dollar (AUD)Conversion Rate: 1 AUD = $0.77 With a floating exchange rate since 1983, the Australian dollar is one of the most traded currencies in the world. As a fluctuating exchange rate and its reliance on its exports, the Australian dollar is influenced by the demand and price of exported commodities. 11. Canadian Dollar (CAD)Conversion Rate: 1 CAD = $0.78 As the national currency of Canada, this monetary unit is also one of the largest reserve currencies in the world. With large quantities of crude oil and uranium supplies, this North American gem has significant export economy. 10. US Dollar (USD)As the US dollar is the major reserve currency of the world, it’s easy to see why this high value currency has made the list. With a wide variety of currencies pegging to the U.S. dollar, a number of commodities use this monetary unit as a standard currency. An example of this is the petrodollar system which allows countries that mainly export oil to exchange the commodity for U.S. dollars. The United States dollar has dropped in value against the euro and other currencies in recent years. This is in part due to the explosion of national debt. 9. Swiss Franc (CHF)Conversion Rate: 1 CHF = $1,08 Characterized as a safe haven currency, the Swiss franc is the national currency of both Switzerland and Liechtenstein. This monetary unit is a valuable currency in the forex market, as it primarily retains its value and is less volatile if the market changes rapidly. 8. European Euro (EUR)Conversion Rate: 1 EUR = $1,19 This well-known legal tender is the official currency for various European Union countries and is the second most popular traded currency. In 2002, Euro banknotes and coins were issued. This led to this currency being implemented to replace 12 national currencies leading to the most significant money changeover in history. 7. Cayman Islands Dollar (KYD)Conversion Rate: 1 KYD = $1,22 Known as one of the top Caribbean islands to visit, this group of islands is a British Overseas Territory. The Cayman Islands holds one of the top spots in the highest currency values. Often it is described as a tax haven due to the minimum tax for foreign investments. 6. Gibraltar Pound (GIP)Conversion Rate: 1 GIP = $1,37 Located in the Iberian Peninsula, Gibraltar is known as a British Overseas Territory. Gibraltar’s currency is closely associated with the British Pound Sterling, as it holds the same currency appreciation. The Gibraltar pound is its own curated substitute for the British pound and is valued at a ratio of 1:1. 5. British Pound Sterling (GBP)Conversion Rate: 1 GBP = $1,37 Known as the oldest currency in the world, the British pound sterling needs no introduction. One of the most traded currencies in the world, this monetary unit is the national currency of various nations in the United Kingdom. In the forex trade market, the biggest financial market in the world, the pair USD and GBP is one of the strongest and is often referenced as the “cable”. 4. Jordanian Dinar (JOD)Conversion Rate: 1 JOD = $1,41 The Jordanian dinar was introduced in 1950 to replace the Palestinian pound. The local currency of Jordan uses the method of pegging to the U.S. dollar. This is in order to refrain from the unpredictable ebbs and flows of floating exchange rates. Unlike other Middle Eastern countries, Jordan is not exclusively an oil-rich country and relies mostly on other exports as a way to gain capital. 3. Omani Rial (OMR)Conversion Rate: 1 OMR = $2,60 The Sultanate of Oman is located in the Arabian Peninsula and uses the Oman rial as its national currency. This country’s strong valuation is due is largely to its oil exports, including refined petroleum and crude oil, to various countries all over the world. 2. Bahraini Dinar (BHD)Conversion Rate: 1 BDH = $2,66 The island nation of Bahrain in the Persian Gulf uses the Bahraini dinar as its national currency. One of the strongest currencies in the Middle East, it was implemented in 1965 to replace the Gulf Rupee. The Bahrain dinar is pegged to the U.S. dollar in order to encourage foreign investments and stabilize exchange rates. 1. Kuwaiti Dinar (KWD)Conversion Rate : 1 KWD = $3,32 The national currency of Kuwait, the Kuwaiti dinar is the most valuable and expensive monetary unit in the world. This small country is one of the biggest oil suppliers in the world, which generates a big part of the governments’ annual income. It is also virtually a tax-free country. Interestingly, the Kuwaiti dinar is pegged to an undisclosed currency basket. This is where the currency of a country is controlled by another country’s currency. Here’s a recap of the most valuable currencies in the world:
Like this? Read these other features: The Most Expensive Cities in the US | The Most Expensive Metals in the World | The Most Expensive Diamonds in the World | The Most Expensive Cheeses in the World Final Thoughts on The Strongest Currencies in the WorldThe foreign exchange market is quite unpredictable, with fluctuating rates. The only constant is the promise of change. The value of currencies is always changing and its lack of stability is what sparks the thrill of investing in this market. If you’re looking to try your luck in the forex market, there are a variety of trading strategy books available to equip you for your journey. As an Amazon Associate we earn from qualifying purchases. Like this guide to the most valuable currencies in the world? Pin for later or share with friends. |
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