Which currency ranks as the most expensive in the world this year?

The core concern of investors and market followers since ancient times is: which country’s currency is the strongest? In a world with currencies from over 180 countries, distinguishing which currency stands out in terms of purchasing power, stability, and exchange value is a question that makes market economics fascinating. This article will explore the currencies that are leading in valuation and have global potential.

Ranking of Strongest Currencies: #1 - Kuwaiti Dinar

The top in market power ranking is Kuwaiti Dinar, the currency of Kuwait in the Middle East. In 1961, it replaced the local rupee with KWD, initially pegged to the British Pound Sterling, and later linked to a basket of currencies.

The strength of the Kuwaiti Dinar comes from the country’s main economic resource: crude oil. Currently, Kuwait produces and exports about 3 million barrels of oil per day, making it the 10th largest producer in the world. This results in a per capita income exceeding $20,000 annually and a persistent current account surplus. All these factors justify holding a high proportion of KWD, with the current exchange rate 1 KWD = 3.26 USD.

Key Figures: Bahraini Dinar (Rank 2)

Neighboring Bahrain also has a similar story. In 1968, it replaced the rupee with the Bahraini Dinar, and since 2001, the government has pegged its currency to the US dollar.

The exchange rate 1 BHD = 2.65 USD makes it the second strongest currency. Bahrain also produces oil and gas, with a per capita GDP over $20,000 and low inflation at 0.8%. All these confirm the stability of BHD in the global market.

Omani Rial: The 3rd Strongest Currency

Continuing in the Middle East, Oman is another oil-exporting country. The Omani Rial (OMR) has made the currency a symbol of national wealth.

Since 1970, Oman has pegged the OMR to the dollar, initially at 1 OMR = 2.895 USD, now adjusted to 1 OMR = 2.60 USD. The country produces 1 million barrels of oil daily, with an economy growing at 4.1% annually, and a continuous current account surplus. Therefore, OMR is ranked as the third most stable currency.

Jordanian Dinar: Rank 4

When Jordan incorporated the West Bank, it adopted the Jordanian Dinar, pegged to the US dollar. Currently, 1 JOD = 1.41 USD.

What makes Jordan notable is that its economy does not rely heavily on oil. The latest growth rate is 2.7% per year, with a GDP per capita of only $3,891. The country has experienced current account deficits for decades, despite foreign reserves of $13.533 billion (Data from ceicdata as of the end of 2023). Nonetheless, the JOD remains the fourth most valuable currency.

Pound Sterling: From Past to Present

The UK has a long history of using the Pound since the Anglo-Saxon era. From medieval times to today, the currency was based on metal value, initially silver (Silver), then on the Gold Standard (Gold Standard).

In the 19th century, other countries adopted this standard, leading to exchange rates: 1 GBP = 4.87 USD, 4.87 CAD, 9.46 Rbls, etc. After World War I, the system shifted to floating exchange rates.

Today, the UK economy ranks 6th globally, contributing 3% of the world’s GDP. London is a major financial hub, and the tech sector is valued at over $1 trillion(. The Pound Sterling remains strong at 1 GBP = 1.33 USD and attracts significant international interest.

Gibraltar Pound: A Small Neighboring Country

Gibraltar, a British Overseas Territory at the tip of the Iberian Peninsula, has used the Gibraltar Pound )GIP( since 1934, pegged 1:1 to the Pound Sterling.

Currently, 1 GIP = 1.29 USD. Although its use is limited locally, the GIP reflects a stable financial system, low taxes, and a hub for online gaming, shipping, and financial services. Not accepted in the UK, it remains a symbol of Gibraltar’s economic self-governance.

Swiss Franc: A Safe Currency

The Swiss Franc )CHF( originated in the 18th century, initially backed by silver, becoming a prominent medium of exchange replacing various local currencies.

A special feature of the Swiss Franc is the law requiring a minimum 40% gold reserve to support its value. Since the World Wars, Switzerland has become a global asset hub, earning the nickname “Safe Haven,” recognized by the IMF and included in the SDR basket.

The “Hamburger Crisis” that led to Greece’s debt issues caused CHF to strengthen further, prompting Swiss central bank measures. Currently, 1 CHF = 1.21 USD.

Cayman Islands Dollar: Financial Center

The Cayman Islands )A British Overseas Territory in the Caribbean( has used the Cayman Islands Dollar )KYD( since 1972, replacing the Jamaican dollar, pegged to USD at 1 KYD = 1.20 USD.

This offshore financial hub is globally recognized. KYD is used for local transactions, while USD is widely accepted. Its strength comes from stable financial laws, low taxes, and reliance on tourism and finance.

Euro: The Common Currency

The Euro is a relatively new currency, officially introduced in 2002, used by 20 of the 27 European Union member states.

In the first three years, the Euro traded below USD, but then appreciated, reaching a peak of 1 EUR = 1.60 USD in 2008.

Today, the Euro is a major reserve currency, accounting for 29.31% of IMF’s SDR and 19.58% of global foreign reserves. It ranks second only to the USD. Currently, 1 EUR = 1.13 USD.

Comparative Table: The Real Strong Currencies

Closing: Choosing the Strongest Currency with Precision

In summary, the most expensive currencies in the world this year include oil-exporting nations and major economic powers from past to present. However, a high exchange rate does not always equate to a safe and influential currency.

Investors aiming to select currencies for investment or holding should consider the credibility of the government and the stability of the underlying economy. That’s why Swiss Francs and Pound Sterling remain desirable, even if their exchange rates are not the highest globally.

Choosing a currency this year involves multiple dimensions: value, stability, and credibility—not just the exchange rate figures.