The world’s most powerful currencies… and the dollar is not leading the way
amid the high inflation rates that are being recorded around the world, various currencies are beginning to suffer blows and feel the effects of economic uncertainty.
It’s worth noting that the strength of a currency depends on the amount of goods and services that can be bought with it and the amount of other currencies that can be obtained in exchange for one unit of that currency, Forex.com reports.
Because dollars are the most widely used currency in world markets, they are the benchmark for calculating the value of other currencies. Therefore, the more dollars it takes to buy one unit of a currency, the stronger it is. If fewer dollars are required, it is considered weaker.
Currently, according to a list published by CNN, the 10 strongest currencies in the world are:
1. the Kuwaiti dinar: $3.21
2. the Barein dinar: $2.65.
3. the Omani riyal: $2.59.
4. Jordanian dinar: $1.41
5. Pound sterling: USD 1.12
6. Cayman Islands dollar: USD 1.21.
7. Euro: $0.97
8. Swiss franc: $0.99
9. Dollar
10. Canadian dollar: $0.72
Surprisingly, the Kuwaiti dinar is the strongest currency in the world, while the dollar is in 9th place.
It is worth recalling that the dollar and the euro recently reached parity for the first time in 20 years. The dollar has strengthened against the euro.
The Kuwaiti dinar is not as easily accessible as the dollar or the euro. The Central Bank of Kuwait explained that since 2007, the currency has been pegged to “an undisclosed basket of international currencies of Kuwait’s main trading and financial partners.
This is done to maintain and strengthen the stability of its currency against other currencies. It also aims to protect the national economy from the effects of imported inflation.
According to Jason Balaguerra, CEO of Values AAA, the currency is strong because it relies on the country’s oil wealth. “There are strong currencies because they are backed by oil, which replaces gold. They are backed by a commodity that has significant international value and stability,” he explains.
According to the CIA, oil accounts for 92 percent of Kuwait’s export earnings and 90 percent of state revenues.
Balaguerra also explains that there are currencies more powerful than the dollar, and Colombians do not recognize them because the country does not interact with them. “Colombia has no debt in these currencies, and we don’t trade goods that we import or export in other currencies,” he says.