Have you wondered why the currencies of one country are different in value when compared to the other country’s currency? Well, that’s not what we are going to discuss here. We are going to discuss the 20 strongest currencies in the world in 2021. If you are thinking of the United States dollar, British Pound, or even the Euro as the strongest currencies then you will be surprised to find out the reality.
According to the United Nations and World Bank, there are 180 currencies used as legal tender in different countries across the globe.
As you know that the global trade is mostly done in the US dollar so every other currency is compared to it. Here, by saying the “Strong Currency” we mean the exchange rate that the currencies we are going to talk about in terms of the US dollar.
In this post, you will understand why some currencies are so richly valued and make them so strong.
Below is the list of the world’s 20 strongest currencies in comparison to the US Dollar as of 2021.
1. Kuwaiti Dinar: KWD
Kuwaiti Dinar is the world’s strongest currency in the world. It holds position number one. Kuwaiti Dinar was first launched in the year 1960 right after Kuwait gained independence from British rule. At that time One Kuwaiti Dinar (KWD) was equivalent to one British pound (GBP).
Kuwait is geographically located between Iraq and Saudi Arabia. It is a very small country both in terms of size and population. KWD conversion rate is $3.31 which means if you exchange $1 you will receive only 0.30 Kuwaiti Dinar.
You must be wondering why is it so that this currency is so high value. So, the currency of Kuwait (KWD) has the highest value because of Kuwait’s stable economy and it is an oil-rich country. It has 9% of the global oil reserves. It is an oil-exporting country and the oil export contributes to almost 95% of the total GDP.
It is very cheap and easy to do oil extraction and making petroleum products. Kuwait is a tax-free country and the unemployment rate is very low. On the GDP per capita list of countries Kuwait positions on number eight. Another interesting fact about Kuwait is that it has a population of 4.67 million people where 1.45 million are Kuwaitis and 3.22 million are foreign nationals.
2. Bahraini Dinar: BHD
Bahraini Dinar (BHD) is the most valuable currencies in the world. BHD conversion rate is $2.66 per one Dinar that means you will get 0.37 BHD if you exchange $1 (USD).
Before 1965 Bahrain used the Gulf Rupee. In 1965 it introduced Bahraini Dinar as the legal tender replacing the Gulf Rupee. BHD is pegged to the US Dollar and since 1987 the exchange rate against the USD is pretty much stable with less volatility.
Around 1 million people call Bahrain their home. Just like Kuwait, Bahrain’s biggest source of revenue is the export of gas and petroleum products. It is also an oil-rich country like Kuwait.
Saudi Arabian currency Riyal is officially a legal tender in Bahrain. The forex rate is constant at 1 Bahraini Dinar which is equal to 10 Saudi Riyals. But BHD is not a legal tender in Saudi Arabia.@@@@
3. Omani Rial: OMR
On our list, the Omani Rial is the third most expensive currency. The conversion rate of OMR 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. It is a developed economy with a very high standard of living.
In the last decade, the government of Oman has decided to diversify its income which mostly comes from crude oil production to other sectors like metallurgy, development of gas production, and tourism. This is because the oil reserves are depleting fast and to keep their economy stable they need to keep generating same kind of income from other means.
4. Jordanian Dinar: JOD
The Jordanian Dinar which has been the currency of Jordan since 1950 is ranked fourth among 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. The Jordanian government maintains fixed exchange rates. The high value of this currency is because of tighter government policy than what is seen in countries that lean more towards floating exchange rates.
Jordan is an emerging market and it is not so economically developed. Jordan lacks natural resources like oil, coal, etc. Also, it has significant external debt. Since 2011 there is a gradual slowdown in the economic growth of Jordan. The slowdown is the result of a substantial rise in population, external debt, and a high rate of unemployment.
5. British Pound: GBP (£)
British Pound Sterling ranks fifth among the world’s strongest currencies having a conversion rate of 1 GBP = 1.38 USD.
GBP is the oldest currency in circulation as the British Empire before world war I was spread across the length and breadth of the globe. They use to say that Sun never sets on the British Empire.
GBP is among the top traded currencies in the world. The GBP/USD pair is commonly known as “the cable,” in the foreign exchange market by traders and it is the third most traded pair in the forex market after EUR and JPY (Japanese Yen).
Pound Sterling is not only the national currency of England but also the currency used 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, Saint Helena have their own respective currency which is valued as 1 per 1. However, the physical appearance of these paper currencies differs from the one issued by the Bank of England.
6. Cayman Islands Dollar – KYD
The Cayman Island’s Dollar is the sixth strongest currency on our list. The primary reason for this is the autonomous British territory. It is considered to be one of the world’s best tax havens for corporates and Individuals.
Cayman Island Dollar conversion rate is 1 KYD = 1.22 USD. It is among the top five largest offshore financial centers.
This country provides licenses to set up their companies to many banks, hedge funds, and insurance companies in this country. Since it is the hub for a whole lot of money coming from all around the world so the economy of this country is very strong and that reflects in its currency as well.
7. European Euro – EUR
The Euro ranks seventh in our list of the strongest currencies with a conversion rate of 1.19 against one USD. EURO is the official currency for 19 European countries. These 19 countries include Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
EURO is the second reserve currency after USD commanding a market share of 25% of all world savings and foreign exchange reserves. 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 the daily volume of the international trade. Keep in mind that EURO (€) boasts to be the second most traded currency after the US Dollar ($).
8. Swiss Franc (CHF)
The Swiss Franc ranks eighth in our strongest currencies list with a conversion rate of 1.08 against one USD. 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 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 their money in Swiss banks.
9. US Dollar (USD)
US Dollar ($) has been the “World Reserve Currency” since 1944 after the Breton Woods agreement. US Dollar is also the most traded currency in the forex market.
USD is always in high demand as it is accepted all over the world. More than 85& of global trade is done in USD. USA with a GDP of more than $22 Trillion is the economic engine of the world.
The USD currency in circulation is worth 1.76 trillion USD as of September 2019. 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. But now the highest currency note in USD is $100.
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. Bahama is one of the most famous tourist destinations richest countries in the Americas. Tourism contributes to 50% of the country’s GDP.
Many of the businesses which cater to the tourism industry keep some extra US dollars with them for the convenience of American tourists those who frequently visit the Bahamas for their vacation.
11. Bermudian Dollar: BMD
Bermudian Dollar (BMD) is the official currency of the British Overseas Territory of Bermuda. This island is in the North Atlantic Ocean known for its pink-sand beaches such as Elbow Beach and Horseshoe Bay. It is one of the last remains of the once vast British colonial empire in North America. 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. Interestingly even though Bermuda is a British overseas territory but it shares its international calling code with the USA and Canada. Its international calling code is +1.
12. Panamanian Balboa: PAB
The Panamanian Balboa is the official currency of Panama along with the USD. That means both Panamanian Balboa and USD are used officially in this country. PAB is also pegged to USD at par like the Bermudian Dollar. The name Balboa is in honor of the Spanish explorer Vasco Núñez de Balboa. Like Cayman Island, this country is also a tax haven and a lot of individuals across the world hide their money here.
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. Despite that Panama is a financial hub.
13. Canadian Dollar: CAD
The Canadian Dollar is the official currency of Canada with a conversion rate of 0.80 against USD. CAD is the fifth-largest reserve currency in foreign exchange reserves. Canada shares its borders with the USA.
Canada has vast reserves of crude oil just behind Saudi Arabia and Venezuela and it has the second-largest uranium production in the world.
14. 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 0.77 against USD, it is considered as 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. Because of the stable economy, a lot of people migrate to Australia every year.
15. Singapore Dollar: SGD
The Singapore Dollar is one of the strongest currencies in the APAC region with a conversion rate of 0.74 against USD.
The Govt of Singapore had issued S$10,000 banknote which was the most valuable in the world in circulation. However, in 2014 the government decided to stop printing this note and initiated the withdrawal process. So now the S$1,000 and S$10,000 notes are no longer in circulation. The highest currency note now is S$500 that is in circulation. But, it is rarely used.
16. Brunei Dollar: BND
Since 1967 the Brunei dollar is the official currency of the Sultanate of Brunei. It is normally abbreviated with the dollar sign $, or alternatively B$ to distinguish it from other dollar-denominated currencies. It is divided into 100 sen or cents. The Brunei dollar is issued by the Autoriti Monetari Brunei Darussalam.
Brunei Dollar conversion rate is the same as SGD as there is a currency agreement between Singapore and Brunei. So you get 0.74 BND in exchange for $1 (USD). SGD and BND are interchangeable at par and these two currencies can be used in Singapore and Brunei both.
Sultan of Brunei is considered to be the richest monarch in the world whose net worth is estimated to be $28 Billion.
17. New Zealand Dollar: NZD
New Zealand Dollar is the official currency of New Zealand. NZD is also used in the Cook Islands, Niue, Tokelau, and the Pitcairn Islands.
It is informally referred to as “Kiwi” or “Kiwi dollar”. The conversion rate of NZD is 0.7 against one US 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 0.6 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. Bulgaria is also a part of Europe. Its economy is good and hence the value of their currency is better than most of the European Union nations.
19. Fijian Dollar: FJD
Fiji got its independence from the British in 1970. Fijian Dollar has been the currency of Fiji with a conversion rate of 0.48 against USD. It was introduced in the year 1969 by replacing the Fijian pound at a rate of 1 pound = 2 Fijian dollars.
Queen Elizabeth II’s pictures were on the coins and banknotes of the Fijian dollar till 2013. But, the new series of coins and Banknotes have replaced that picture of Queen Elizabeth II with plants, animals, and birds.
20. Brazil Real: BRL
The Brazilian Real is the official tender in Brazil with a conversion rate of 0.19 against one dollar. BRL was introduced on 1 July 1994, during the presidency of Itamar Franco. BRL ranks last at 20th position in our list of the world’s strongest currencies. Brazil is one of the leading exporters of iron ore, crude petroleum, soybeans, sugar, coffee, corn, etc., worldwide.
Export of goods and services contributes to over 14% of Brazil’s GDP.
So, these are the 20 strongest currencies in the world in 2021. I hope you enjoyed reading this post and if you liked it do share it on your social media using the social media buttons below.
