What Is the Strongest Currency and How Is It Measured?

If you found a bag full of cash, which currency would you use? A quick answer might not be the best. If you had a suitcase full of US dollars, you could probably start spending money right away (assuming you’re in the US or a country that accepts the US dollar as its official currency), but in reality, it’s important to choose the currency that is more valuable.

So, before you get carried away with fantasies of getting free money, let’s take a look at the strongest currencies in the world.

It’s useful to know what we mean by relative value in currencies before moving on to our list. Let’s begin by stating that a currency is more valuable than another when it can be exchanged for many units of that other currency in order to keep things as simple as possible. This implies that a certain amount of your money will be equivalent to multiple foreign currencies.

Does that make sense? Alright, let’s look at this example: The US dollar is a more valuable currency if it can buy you 100 Japanese yen for every US dollar. In actuality, the dollar is 100 times more valuable in this relatively true scenario.

In the same token, a Kuwaiti dinar is worth three times as much if I need to pay three dollars for it.

Ranking the 10 Most Valuable Currencies in the World

It’s important to note that the list of the most valuable currencies is always somewhat fluid. After all, exchange rates can change daily and economic stability isn’t guaranteed anywhere. With that in mind, here are the world’s most valuable currencies at the time of publication:

1. Kuwaiti Dinar (3.28 USD)

Clearly at the top is the Kuwaiti Dinar, the national currency of Kuwait. Over the past five years, the value of the Kuwaiti dinar has remained at just over $3. This stability and high value is mainly due to the fact that Kuwait is a small, wealthy country that exports a lot of oil.

2. Bahraini Dinar ($2.65)

Second place belongs to another wealthy Gulf country. In this case, like Kuwait, crude oil is its main export, but Bahrain also exports raw aluminum and aluminum products such as wire. The Bahraini Dinar has been pegged to the US Dollar since 1986, with 1 Bahraini Dinar equivalent to 2.65 US Dollars.

3. Omani Rial ($2.60)

1 Omani Rial is worth $2.60. Like the Dinar, the currency is pegged to the US Dollar at a specific exchange rate. Oman is a Gulf country with an oil-based economy. Oil and gas exports ensure a stable, high-value currency.

4. Jordanian Dinar ($1.41)

The Jordanian Dinar, the official currency of Jordan, is worth 1.41 dollars. It has been pegged to the US Dollar since 1950.

Unlike the previous countries on this list, Jordan is not oil rich. In fact, the country’s economic growth has not been impressive for some time, leaving it heavily in debt. Nevertheless, Jordan boasts a diversified economy, with exports ranging from calcium phosphate (important for industrial chemicals and fertilizers) to jewellery.

5. Pound Sterling ($1.31)

In case you haven’t been to London for tea and crumpets recently, the Pound Sterling, also known as the British pound sterling, is the national currency of the United Kingdom.

Because the UK has a large and diverse economy, it currently costs $1.31 to get one pound. The country also benefits from low inflation, which has helped the pound stay strong against the US dollar.

6. Gibraltar Pound ($1.31)

Gibraltar is a small British overseas territory located on an island off the tip of Spain. Once an important port, the Gibraltar pound is pegged to the British pound and remains closely linked to the UK. One Gibraltar pound is worth 1.31 dollars.

7. Cayman Dollar ($1.20)

You probably know the Cayman Islands as a vacation spot or as a place where the rich go to park their money. Both characteristics lead to a strong, stable economy with a stable, valued currency to match.

The Cayman Islands are largely tax-free, which has helped attract foreign investment, especially in the financial services sector. One Cayman Dollar is worth $1.20 and is pegged to the US Dollar.

8. Swiss Franc ($1.18)

The Swiss Franc is another example of a small country with a relatively expensive currency. 1 Swiss Franc is equivalent to 1.18 US Dollars. As with the Cayman Dollar, a banking sector with a tradition of discretionary power ensures that the Swiss Franc remains one of the most valuable and stable currencies in the world.

It is also known as the gold hub of the world. Most of the gold mined internationally is shipped through Switzerland where it is refined into gold bars and used to make watches, one of Switzerland’s most important exports.

9. Euro (1.1 USD)

The official currency of the European Union and the second most traded currency in the world, the Euro is a valuable and very popular currency in the foreign exchange market. The European Union is an economic union of various European nations and economic superpowers with corresponding currencies.

The Euro is the second largest reserve currency in the world. Currently, 1 Euro is worth 1.1 US Dollars. The Euro and the US Dollar both rank at the top of the world’s major currency pairs, meaning that they are the most commonly traded against each other.

10. US Dollar (1 USD)

Finally, we come to the good old familiar US Dollar. You might be surprised to see the dollar so low on this list. Sure, he’s in the top 10, but that’s just the way it is. The reasons for this are varied, but they have to do with the size and complexity of the US economy.

The US Dollar is the most traded currency in the world and is also the world’s most important reserve currency, which means that almost every other major economy buys the US Dollar to keep their economies and their currencies stable and competitive.

What makes a currency valuable?

If you’re interested, you’re probably asking: Why? Why is one country’s money more valuable than another? The perhaps unsurprising answer to this question is: “A lot of things.”

First of all, there’s trade. In the modern world of complex international trade, exchanging one currency for another is how you make things in one country and sell them in another. If your economy imports a lot of things and is very large, you may have a stable currency (and perhaps a frequently traded currency), but not necessarily a very valuable currency.

On the other hand, if your economy is primarily exporting and produces (or mines) particularly valuable goods that are hard to get elsewhere, you are more likely to have both a stable and a valuable currency. For this reason, many of the world’s strongest currencies come from the Gulf countries, whose economies are primarily fueled by oil exports.

To further complicate matters, currencies are also part of the international financial world and are traded in foreign exchange markets. A currency with high demand will increase in value, while the relative value of a currency with few interested buyers will decrease.