Highest and strongest currencies in the world 2023
This article provides an up-to-date ranking of the highest and strongest currencies in the world based on a review of the 180 monetary exchanges recognised internationally.
While the US dollar remains the world's reserve currency, it is by no means the highest or most valuable currency in the world. This article provides an up-to-date ranking of the world's strongest currencies based on a review of the 180 monetary exchanges recognised internationally, including African currencies.
The value of currencies depends on a variety of circumstances. Still, it generally increases due to government economic stimulus, a low inflation rate (around 2% per year), and an improved trade balance.
For instance, a nation that imports more foreign currency than it exports has a trade surplus and will therefore have one of the most expensive currencies in the world.
In actuality, the steady strengthening of a currency is not necessarily a beneficial phenomenon, and governments often devalue their currencies on purpose. Hence, having one of the costliest currencies in the world is indicative of a country's ability to effectively manage inflation.
Cryptocurrencies are the most valuable currencies in the world, but they have been excluded from this list since they are not recognised as legal tender.
As measured against the US dollar, the global dominant reserve currency, these are the highest currencies in the world:
The US dollar has been the world's reserve currency since the Bretton Woods agreement of 1944 and is the ninth-highest currency in the world. It is the most frequently traded currency on the Forex market, accounting for more than 85 per cent of daily transactions.
Being one of the strongest currencies in the world, the US dollar accounts for approximately two-thirds of the world's savings, allowing it to be used as a medium of exchange in virtually every nation.
Despite being one of the most valuable currencies in the world, the US dollar has lost more than a tenth of its value versus the euro due to the extraordinary US monetary and fiscal reaction to the coronavirus crisis.
As of 2022, the amount of USD in circulation was $2.304 trillion, of which only 30% was in the United States.
The euro, the official legal tender of 19 eurozone nations and some adjacent countries, is the eighth most valuable currency in the world and the second most used reserve currency. A single central bank (the European Central Bank) controls the currency and conducts monetary policy for the eurozone.
Due in part to the fact that it is used in economically developed nations, the euro has strengthened over the last decade to become one of the highest currencies in the world. Around twenty-five nations have linked their currencies to the euro.
As one of the most expensive currencies in the world, the euro is the second most traded currency behind the US dollar, and the EUR/USD currency pair accounts for approximately 25 per cent of daily trading activity.
The euro exchange rate was originally high versus the dollar, but due to the terrible economic and political circumstances in several European nations, particularly Greece, it started declining over time.
Although one of the strongest currencies in the world, the euro is one of the youngest, having emerged after the foundation of the European Union.
The Swiss franc, one of the five reserve currencies and a traditional "safe haven," is the seventh-highest currency in the world.
The legal tender is one of the world's most stable currencies since it is susceptible to minimal inflation and appreciates against other currencies during chaotic periods or political instability. Because of this, the franc is often used to store money or execute foreign transactions.
Switzerland is one of the richest nations with a strict monetary policy and low debt levels, making the Swiss franc a secure investment for investors.
As one of the strongest currencies in the world, the Swiss franc is also the official currency of numerous other nations, including Haiti, Liechtenstein, and Campione d'Italia (an enclave of Italy surrounded by Switzerland).
With Britain being one of the world's five largest economies, the British pound is the sixth most valuable currency in the world. In 2021, the country's economic growth was the highest among advanced nations, increasing by 7.5% over the previous year.
As well as being one of the most expensive currencies in the world, the British pound is the fourth most popular reserve currency behind the US dollar, the euro, and the Japanese yen.
With the British Empire spanning the world until the First World War, the pound sterling is the oldest currency.
Being the official currency of the United Kingdom's overseas territories, including Northern Ireland, Gibraltar, and Maine, has contributed to the British pound continuing to be one of the highest currencies in the world.
In addition to Great Britain, three additional dependent territories utilise the pound sterling as a parallel currency: Guernsey, Jersey, and the Isle of Man.
Traders often refer to the GBP/USD pair as "cable," after the first transatlantic communications cable that united the United Kingdom and the United States. It is the third most traded currency pair on the foreign exchange market, after EUR/USD and EUR/JPY.
The British pound is the most valuable currency in Europe and accounts for around 12.8% of daily foreign exchange market transactions. The pound was historically worth more than the US dollar but started to lose ground in the 20th century.
However, in the 1980s, the British pound restored its lead over the US dollar as one of the strongest currencies in the world.
5.Cayman Islands dollar
The Cayman Islands dollar, the legal tender of the British Overseas Territory, Cayman Islands, is the fifth most valuable currency in the world due to the favourable laws in the offshore zone.
Financial and tourist services are well-developed in the Cayman Islands, generating 70% of GDP, but the major reason for the KYD being one of the highest currencies in the world is its reputation as one of the best tax havens globally for corporations and individuals.
In addition, the nation is one of the five major offshore financial hubs and issues business licences to many banks, hedge funds, and insurance firms.
The Cayman Islands Dollar also owes its status as one of the strongest currencies in the world as a result of being pegged to the US dollar.
Although Jordan's economy is one of the poorest in the Middle East, the Jordanian dinar, which is pegged to the SDR, the IMF's unit of account, is the fourth-highest currency in the world.
The nation is a developing market that lacks natural resources and faces chronic unemployment, inflation, and foreign debt.
Nevertheless, the Jordanian dinar joined the discussion of "strongest currencies" in 1948, when it was pegged to the US dollar at the rate of 1 dinar = $2.19 after adopting a fixed rate system by the International Monetary Fund (IMF).
This peg lasted until 1995, when Jordan acceded to the General Agreement on Tariffs and Trade (GATT). The dinar was then fixed to a basket of currencies until it was re-pegged to the dollar at a rate of 1 dinar = $1.42 in 2001.
The huge oil reserves of Oman, like those of other Gulf nations in the Middle East, contribute to the Omani rial's position as the third-highest currency in the world.
Although Oman's economy depends on oil sales, the government is attempting to diversify revenue by boosting gas production, metallurgy, tourism, and agriculture.
One of the most valuable currencies in the world, the Omani rial was introduced in 1970 under the name "Saidi rial" and has been pegged to the US dollar since 1973.
As one of the most expensive currencies in the world, the Omani rial's buying power is so high that the government has created 0.25 and 0.5 rial notes.
The Omani rial has maintained its status as one of the strongest currencies in the world as a result of historically stringent monetary policy. To control conflicts in the Middle East, local officials restrict the money supply, which impacts the inflation rate and the currency's value.
Pegged to the US dollar, Bahrain's substantial reliance on oil, which accounts for more than 40% of export revenues, makes the Bahraini dinar the second-highest currency in the world. In addition to these factors, the nation boosts its banking and tourism industries and exports natural gas and aluminium.
The Bahrain dinar was adopted in 1965 to replace the Gulf rupee, and its exchange rate has been relatively steady since 1987.
Despite the significant impact of low oil prices on the country's economy, the annual average of the Bahraini dinar has remained close to the current exchange rate since 2011, and its exchange rate against the US dollar has not changed since 2005, helping it maintain its position as one of the most valuable currencies in the world.
Kuwait's technique for producing petroleum products is the world's cheapest, making the Kuwaiti dinar the highest currency in the world. The nation has substantial oil reserves, with oil exports making up over 95% of its revenue.
The reputation of the Kuwait Dinar as the most expensive currency in the world is attributable to the stable economy of Kuwait, one of earth's wealthiest nations. It has a low unemployment rate, no value-added tax, and a portion of its export revenues are contributed to the National Welfare Fund.
The Kuwaiti dinar was created in 1960 when Kuwait gained independence from the British Empire and was equivalent to a pound.
Historically, the Kuwaiti dinar has ranked first among the world's most valuable currencies on account of the country's substantial oil exports. More than 80% of the country's wealth comes from the oil industry since "black gold" extraction is inexpensive.
Since 2007, the dinar has been pegged to a weighted basket of currencies after four years of being fixed to the US dollar.