I’m sure you must have pondered enough to know which is the world’s strongest currency. Most likely the first thought which might crop up in your mind is that it could be either British Pound, US Dollar, or Euro.
There has been a lot of turbulence witnessed by market participants in the currency market across the world ever since Russia ordered a special military operation in Feb 2023 to invade Ukraine. The Dollar Index (DXY), which represents the value of the USD relative to a basket of foreign currencies has registered supernormal gains this year in a short period of time rising from 92 to 105.
There are approximately 180 currencies across the world that are used as legal tender according to The United Nations but do you know which one holds the most value?
The definition of strong currency here is the one that is the most expensive when compared to the global reserve currency – the US dollar. In other words, when you exchange you will get the smallest currency return for 1 US dollar.
Read our article to find out which are the world’s 20 strongest currencies in 2023, why are they strong and what makes them so richly valued.
20 Strongest Currencies In The World
The world is not the same as it used to be before the global outbreak of the Coronavirus pandemic followed by the ongoing conflict between Russia and Ukraine for many months now. It had a devastating impact on major economies across the world by disrupting the supply chain and plunging stocks, bonds, commodities, etc to record lows in 2020.
Below is the list of the world’s 20 strongest currencies in comparison to the US Dollar as of July 2023.
1. Kuwaiti Dinar: KWD
Kuwaiti Dinar is the world’s strongest currency in the world holding number one position. Kuwaiti Dinar was first launched in the year 1960 when it gained independence from the British empire and it was equivalent to one pound at that time.
Kuwait is a relatively very small country that is geographically located between Iraq and Saudi Arabia. KWD conversion rate is $3.257 which implies if you exchange one USD you will receive only 0.306 Kuwaiti Dinar.
The currency has the highest value because of Kuwait’s stable economy and it is an oil-rich country that has 9% of the global oil reserves located on its territory according to the wiki. Kuwait is heavily dependent on oil exports which contribute to almost 95% of the country’s revenue.
Production of petroleum products in Kuwait is easy and the production cost is the cheapest compared to other countries. An interesting fact about the country is that Kuwait is a tax-free country and the unemployment rate is very low. Kuwait is at number eighth position in the list of countries with the highest GDP per capita.
2. Bahraini Dinar: BHD
Bahraini Dinar (BHD) takes the second spot in the list of the most valuable currencies in the world. BHD conversion rate is $2.659 per one Dinar which implies you will get 0.37 BHD if you exchange one dollar.
BHD stopped using the gulf rupee as legal tender and introduced Bahraini Dinar in 1965. BHD is pegged to the US Dollar and since 1987 the exchange rate against the USD is pretty much stable with less volatility.
Bahrain has a population of approximately 1 million. Just like Kuwait, this Persian Gulf island state’s biggest source of revenue is from the export of gas and petroleum products.
Bahrain is one of the leading oil-producing countries, the major profit-gaining industry here was pearl mining. However, in the 1930s the production was stopped due to pearl cultivation in Japan.
One of the fascinating facts is that Saudi Arabian currency Riyal is officially a legal tender in Bahrain. The forex rate is constant at 1 Dinar which is equal to 10 Riyals.
3. Omani Rial: OMR
The Omani Rial is the third most expensive currency in the world. OMR conversion rate for one Rial is equal to 2.60 USD.
Omani Rial was introduced in 1970 as Saidi Rial named after the sultanate of Oman, The House of Al Said. Since 1973 OMR is pegged to the US Dollar.
The government of Oman has issued 1/4 and 1/2 Rial banknotes as the purchasing power of Omani Rial is very high. Just like other gulf countries in the middle east Oman is also an oil-rich country and it is now a developed economy with a high standard of living.
The government of Oman has decided to diversify its income which is heavily linked to crude oil production to different other sectors like metallurgy, development of gas production, and tourism as oil reserves are depleting fast.
4. Jordanian Dinar: JOD
The Jordanian Dinar which has been the currency of Jordan since 1950 is ranked fourth in our list of the strongest currencies with a conversion rate of 1 JOD = 1.41 USD.
It was pegged to the US Dollar initially at a higher rate but for the last 2 decades, the country has managed successfully to maintain this peg.
There is no fundamental thesis available to justify its high valuation as Jordan is an emerging market and it is not so economically developed. Jordan lacks natural resources like oil, and coal among others and it has significant external debt as well.
There is a gradual slowdown in the economic growth of Jordan since 2011 due to a substantial rise in population, external debt, and unemployment.
5. Cayman Islands Dollar: KYD
The Cayman Islands Dollar is the only Caribbean currency in the fifth position which features in our list of strong currencies. The primary reason for this is because of the fact that it is an autonomous British territory and considered to be one of the world’s best tax havens for corporates and Individuals.
Cayman Islands conversion rate is 1 KYD = 1.22 USD and it is among the top five largest offshore financial centers.
The country provides licenses to set up their companies to many banks, hedge funds, and insurance companies.
6. British Pound: GBP
British Pound Sterling ranks in the sixth position among the world’s strongest currencies holding a conversion rate of 1 GBP = 1.215 USD. Many people have a perception that British Pound holds the highest monetary value but it is not.
GBP is the oldest currency in circulation in British Empire before world war I was spread across the length and breadth of the globe.
GBP is among the top traded currencies in the world. The GBP/USD pair is commonly known as “the cable,” in the Fx market by traders and it is the third most traded pair in the forex market after EUR and JPY.
The Pound Sterling is not only the national currency of England but also in Scotland, Wales, and Northern Ireland. GBP is used as a parallel currency in 3 British Crown Dependencies – Guernsey, Jersey, and the Isle of Man.
Few British colonies like Falkland Islands, Gibraltar, and Saint Helena have their own respective currency which is valued at 1 per 1. However, the physical appearance of these paper currencies differs from the one issued by the Bank of England.
7. European Euro: EUR
The Euro ranks seventh in our list of the strongest currencies with a conversion rate of 1.042 against one dollar. EURO is the official currency for 19 European countries.
EURO is the second reserve currency after the USD commanding a market share of 25% of all world savings. Approximately 25 countries have pegged their currencies to Euro at a fixed rate.
EUR/USD pair also referred to as “Fiber” is the most traded currency pair which accounts for more than 25% of daily volume. Also, EURO boasts to be the second most traded currency after the US Dollar.
8. Swiss Franc: CHF
The Swiss Franc ranks eighth in our top currencies list with a conversion rate of 1.091 against one dollar. CHF is one of the most stable currencies worldwide which is least affected by inflation.
Switzerland is one of the richest countries in the world and it maintains a strict monetary policy and low debt levels. This is one of the primary reasons why it is a safe bet for investors while trading or storing currency.
9. US Dollar
US Dollar has been the “World Reserve Currency” since 1944 after the Breton woods agreement. US Dollar is the most traded currency in the forex market.
USD is always in high demand as it is accepted all over the world. USD is involved in more than 85% of daily forex trades. The USA with a GDP of more than 22 Trillion is the economic engine of the world.
The USD currency in circulation is worth 1.69 trillion USD as of September 2018. Only 30% of currency is in circulation inside the United States.
There was a time in the US when notes with the face value of $1,000, $5,000, $10,000, and $100,000 were issued.
10. Bahamian Dollar: BSD
BSD happened to be the official currency of The Bahamas from the year 1966. BSD is pegged to USD at par.
Many of the businesses which cater to the tourism industry keep some extra US dollars with them for the convenience of American tourists.
11. Bermudian Dollar: BMD
BMD is the official currency of the British Overseas Territory of Bermuda. BMD is pegged to USD at a one-to-one ratio. The highest note in circulation is 100 BMD.
Trading of the Bermudian dollar outside Bermuda is not allowed. One can find both USD and BMD notes in Bermuda.
12. Panamanian Balboa: PAB
The Panamanian Balboa is the official currency of Panama along with the USD. PAB is also pegged to USD at par. The name Balboa is in honor of the Spanish explorer Vasco Núñez de Balboa.
When Panama gained independence in 1906 it replaced the Colombian Peso with The Balboa. An interesting fact about Panama is that country has never had an official central bank.
13. Canadian Dollar: CAD
The Canadian Dollar is the official reserve currency of Canada with a conversion rate of 0.778 against USD. CAD is the fifth-largest reserve currency.
Canada has vast reserves of crude oil just behind Saudi Arabia and Venezuela and it has the second-largest uranium supply in the world.
14. Singapore Dollar: SGD
The Singapore Dollar is one of the strongest currencies in the APAC region with a conversion rate of 0.717 against the USD.
The Govt of Singapore had issued S$10,000 banknote which was the most valuable in the world in circulation. However, in 2014 they decided to stop printing and initiated the withdrawal process.
15. Brunei Dollar: BND
Brunei Dollar conversion rate is the same as SGD as there is a currency agreement between Singapore and Brunei. SGD and BND are interchangeable at par and can these two currencies can be used in Singapore and Brunei.
Sultan of Brunei is considered to be the richest monarch in the world whose net worth is estimated to be $28 Billion.
16. Australian Dollar: AUD
The Australian Dollar is the official legal tender not only in Australia but also in some pacific island states. With a conversion rate of 0.688 against USD, it is considered one of the stable currencies.
AUD ranks fifth in the most traded currency in the forex market which accounts for 6.8% of daily traded volume.
17. New Zealand Dollar: NZD
New Zealand Dollar is the official currency for not only New Zealand but also the Cook Islands, Niue, Tokelau, and the Pitcairn Islands.
In forex parlance, it is informally referred to as “Kiwi” or “Kiwi dollar”. The conversion rate of NZD is 0.624 against one dollar.
NZD was introduced in the year 1967. NZD is the eleventh most traded currency in the world. It contributes to 2.1% of daily foreign exchange volume.
18. Bulgarian Lev: BGN
Bulgarian Lev is the official currency of Bulgaria with a conversion rate of 0.534 against USD. Initially, in the year 1997, BGN entered into a currency board arrangement with Deutsche Mark at a fixed rate.
After the introduction of the euro currency, it was pegged to EUR at a fixed rate of BGN 1.95583: EUR 1.
19. Fijian Dollar: FJD
Fijian Dollar has been the currency of Fiji with a conversion rate of 0.454 against USD. It was introduced in the year 1969 by replacing the Fijian pound at a rate of 1 pound = 2 dollars.
In spite of gaining independence in 1970 from British, coins and banknotes continued to feature Queen Elizabeth II till 2013. It was later replaced with pictures of plants and animals.
20. Brazil Real: BRL
The Brazilian Real is the official tender in Brazil with a conversion rate of 0.187 against one dollar. BRL was introduced in the year 1994.
BRL ranks last at 20th position in our list of the world’s strongest currencies. Brazil is one of the leading exporters of base materials worldwide.
Well, we have tried to provide the most information on the 20 strongest currencies in the world in 2023. Hope you enjoyed reading the article.
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