The US dollar is still used as the world’s reserve currency, although it is not the highest or most valuable one. Based on an examination of 180 internationally accepted currency exchanges, including African currencies, this article presents an up-to-date ranking of the world’s strongest currencies.
A lot of factors affect how much money is worth. Nevertheless, it often rises as a result of governmental economic stimulation, a low inflation rate (of about 2% annually), and a better trade balance.
A country that has a trade surplus and one of the most expensive currencies in the world, for instance, is one that imports more foreign currency than it sells.
In reality, governments frequently discount their currencies on purpose, and the continuous strengthening of a currency is not always a positive event. Therefore, having one of the most expensive currencies in the world indicates that a nation can efficiently control inflation.
The most valuable currency in the world is cryptocurrency, however it is not included on this list because it is not accepted as legal cash.
These are the highest currencies in the globe as compared to the US dollar, which serves as the primary reserve currency worldwide:
9. US dollar
Since the 1944 Bretton Woods Agreement, the US dollar has served as the world’s reserve currency. It ranks ninth among all currencies. With more than 85% of all daily transactions taking place in it, it is the most traded currency on the forex market.
The US dollar is one of the strongest currencies in the world and represents around two thirds of global savings, making it a widely accepted form of payment throughout the world.
The exceptional US monetary and fiscal response to the coronavirus crisis has caused the US dollar, one of the most valued currencies in the world, to lose more than a tenth of its value against the euro.
Only 30% of the $2.304 trillion in USD in circulation as of 2022 were found in the United States.
8. Euro
The second most used reserve currency worldwide and the recognised legal tender of 19 countries in the eurozone, the euro is the ninth most valuable currency in the world. The eurozone’s currency is under the jurisdiction of a single central bank, the European Central Bank, which also implements monetary policy.
The euro has grown over the past ten years to become one of the strongest currencies in the world, in part because it is used in economically developed countries. The euro is connected to the currencies of about 25 countries.
The euro is the second most traded currency behind the US dollar, and the EUR/USD currency pair makes up over 25% of all daily trading activity despite being one of the most expensive currencies in the world.
The dollar-to-euro exchange rate was initially high, but over time it began to decline as a result of the dire economic and political conditions in many European countries, especially Greece.
The euro, despite being one of the world’s strongest currencies, is also one of the most recent, having been created after the European Union.
7. Swiss franc
One of the five reserve currencies and a renowned “safe haven,” the Swiss franc is the seventh-highest currency in the world.
Due to its low inflation risk and tendency to appreciate against other currencies during tumultuous times or periods of political upheaval, the legal tender is one of the most stable currencies in the world. As a result, the franc is frequently used to hold money or carry out international transactions.
Due to its rigorous monetary policy, low debt levels, and status as one of the richest countries, the Swiss franc is a safe bet for investors.
The Swiss franc, one of the world’s most powerful currencies, is also used as the official currency of many other countries, including Haiti, Liechtenstein, and Campione d’Italia (an Italian enclave surrounded by Switzerland).
6. British pound
The British pound is the sixth most valued currency in the world, with Britain being one of the five largest economies worldwide. The nation’s economy grew by 7.5% over the previous year in 2021, the fastest rate among developed countries.
The British pound, which ranks fourth in terms of popularity among reserve currencies after the US dollar, the euro, and the Japanese yen, is also one of the most costly currencies in the world.
The pound sterling is the oldest currency, having been used throughout the British Empire’s global expansion up until the First World War.
The British pound has continued to rank among the top currencies in the world in part because it is the official currency of the United Kingdom’s overseas territories, notably Northern Ireland, Gibraltar, and Maine.
5. Cayman Islands dollar
Due to the beneficial legislation in the offshore zone, the Cayman Islands dollar, the official currency of the British Overseas Territory of Cayman Islands, is currently the fifth most valuable currency in the world.
The Cayman Islands’ financial and tourism sectors provide 70% of the country’s GDP, but the KYD’s status as one of the world’s most valuable currencies is mostly due to its reputation as one of the world’s top tax havens for businesses and individuals.
Additionally, the country grants business licences to numerous banks, hedge funds, and insurance companies and is one of the five major offshore financial hubs.
The Cayman Islands Dollar’s ranking as one of the world’s strongest currencies is also due to the fact that it is tied to the US dollar.
4. Jordanian dinar
The Jordanian dinar, which is tied to the SDR, the IMF’s unit of account, is the fourth-highest currency in the world despite the fact that Jordan has one of the lowest economies in the Middle East.
Being a developing market, the country struggles with chronic unemployment, inflation, and foreign debt in addition to a lack of natural resources.
Nevertheless, the Jordanian dinar entered the conversation about the “strongest currencies” in 1948 when it was locked to the US dollar at a rate of 1 dinar = $2.19 after the International Monetary Fund (IMF) adopted a fixed rate system.
Until Jordan joined the General Agreement on Tariffs and Trade (GATT) in 1995, this peg persisted. From that point on, the dinar was tied to a basket of currencies until 2001, when it was again pegged to the dollar at a rate of 1 dinar = $1.42.
3. Omani rial
Like other Gulf countries in the Middle East, Oman has enormous oil reserves, which help to rank the Omani rial as the third-highest currency in the world.
Oman’s economy is largely dependent on oil sales, but the government is working to diversify its sources of income by promoting the gas industry, metallurgy, tourism, and agriculture.
The Omani rial, one of the world’s most precious currencies, was first issued in 1970 under the name “Saidi rial” and has been tied to the US dollar since that year.
The Omani rial is one of the most costly currencies in the world, and because of its high purchasing power, the government has issued 0.25 and 0.5 rial notes.
Due to historically strict monetary policy, the Omani rial has retained its position as one of the strongest currencies in the world. Local authorities limit the money supply to quell conflicts in the Middle East, which affects the pace of inflation and the value of the local currency.
2. Bahraini dinar
Bahrain’s heavy reliance on oil, which generates more than 40% of export income and is pegged to the US dollar, makes the Bahraini dinar the second-highest currency in the world. In addition to these elements, the country develops its banking and tourist sectors and increases its natural gas and aluminium exports.
The Gulf rupee was replaced by the Bahrain dinar in 1965, and its value has remained largely stable since then.
The annual average of the Bahraini dinar has been close to the current exchange rate since 2011, and its exchange rate against the US dollar has not changed since 2005, helping it to maintain its position as one of the most valuable currencies in the world despite the significant effects of low oil prices on the nation’s economy.
1. Kuwaiti dinar
The world’s most affordable method of generating petroleum products is used in Kuwait, making the Kuwaiti dinar the most valuable currency. The country has large oil reserves, and more than 95% of its income comes from oil exports.
The steady economy of Kuwait, one of the richest countries on earth, is responsible for the Kuwait Dinar’s reputation as the most costly currency in the world. It doesn’t have a value-added tax, has a low unemployment rate, and contributes a percentage of its export earnings to the National Welfare Fund.
When Kuwait became independent from the British Empire in 1960, the Kuwaiti dinar was established and had pound-denominated value.
Due to the nation’s significant oil exports, the Kuwaiti dinar has historically been the most valued currency in the world. Since the extraction of “black gold” is cheap, the oil industry accounts for more than 80% of the nation’s wealth.
After being tied to the US dollar for four years, the dinar has been tethered to a weighted basket of currencies since 2007.