Most Expensive Currency In The World And Why So Expensive
The most expensive currency in the world at the moment in year 2018 is the Kuwaiti Dinar. It has more value than the American Dollar and it is not going to be surpassed by any other currency anytime soon. Here is all that you need to know about it.
Most Expensive Currency
The Kuwaiti Dinar or KWD is the most expensive currency and has been a popular currency for a long time due to its worth. Its most common rate of exchange is INR to KWD rate as a large number of Indian community reside in Kuwait. It is considered valuable because of its consistent stability, on which many demands and changes are never applicable as by law and government policies which makes its the most expensive currency. Another reason is the oil export that has boosted its market and value.
History of the Kuwaiti Dinar
It was initially brought in 1960 as a replacement for the Gulf rupee and was equivalent to one pound sterling. The fixation of the rupee price led to its higher conversion rate to the dinar. In 1990, during the Iraq-Kuwait war, a huge sum of money was stolen during the Kuwaitian Central Bank raid and that affected its worth. Afterward, the war ended and new bank notes were issued that replaced the older ones and restored the value. The previously stolen currency was declared demonetized and the newly issued currency maintained the Kuwaiti Dinar and making it the most expensive currency. However, the stolen money was never really given back by the Iraqi government.
Popularity and Conversion Rates
The link between KWD and USD has been ended for quite some time. KWD is now connected with a variety of other currencies. The following are the conversion values of KWD into other currencies:
1 KWD = 3.30 US Dollars
1 KWD = 2.46 British Pound
1 KWD = 225.10 Indian Rupees
*These currency exchange rates are for 25 July 2018 which may vary daily.
Reasons For Most Expensive Currency (Stability & Value)
There are many reasons for the Kuwaiti Dinar being the most expensive currency in the world. Some of them are as follows:
Oil and Economy
The state of Kuwait is very stable economically. It has rich reserves of oil and exports it to nations around the world. In the global market, there is a high demand for crude oil and Kuwait covers a major portion as its provider. So the value of the Dinar rises as the demands change and rise. 94% of the export revenue of Kuwait is through petroleum export.
The country has a high GDP and per capita income which ultimately affects the price and currency. As of 2015, the GDP was estimated to be around $123.2 billion and per capita GDP was $72,200 which helped it maintain its place as the worlds most expensive currency.
Low Amount of Issued Currency:
The amount of money issued is very less compared to the GDP of the country which accounts for the high value. Other nations usually issue a larger sum of money every year and this causes fluctuations in the currency. But when less currency is issued, it is less circulated and hence really expensive. The more it is issued, the more it becomes cheaper.
As mentioned before, the Dinar has always been stable as it is not subjected to factors that can harshly affect it. It is connected with a package of currencies and not with the US dollars like other traditional ones. These unconventional steps caused a bit of an isolation of the currency and less regulation with USD led it to be unique and hence, more costly.
Use of KWD in international market and trade:
Now, another surprising thing is that when buyers get the petroleum from the state of Kuwait, it is obligatory to be bought in the Kuwaiti Dinar only, no other currency can be used for the exchange, at least within their territory. Because of that, the KWD stays in the country and the sales are profited by the foreign currency that is being converted to the dinar, ultimately increasing the value of the foreign reserves. Buyers buy billions of the KWD and it is then used in the Kuwaiti market for trade.
Some Other Expensive Currencies
Even though the Kuwaiti Dinar is the most expensive currency, there are other ones that are also pretty strong. These include
It comes as the second most expensive currency and one of the reasons include its small population of only a million people. It also has huge oil reserves like Kuwait and hence, larger exports. It rarely faces fluctuations and 1 Bahrain Dinar is equivalent to 2.56 US dollars.
It comes as the third most expensive currency. Oman benefits from its geo strategic location and has a developed and stable economy. The purchasing power is extremely high leading the government to issue half or quarter of a Rial. 1 Oman Rial is equal to 2.60 USD.
It comes as the Forth most expensive currency. Unlike the previously mentioned currencies, Jordan has a valuable currency even though it has economic troubles and fewer resources. Still, 1 Jordan Dinar costs 1.41 USD making it more powerful than the latter.
It comes as the fifth most expensive currency. Contrary to the popular opinion, the British Pound is not the strongest currency in the world. Still, it has good power and it is present in different forms in different regions where the British rule, like in Scotland, Australia, North Ireland, Gibraltar etc. 1 Great Britain Pound is equal to 1.39 USD.
So this was all about the Kuwaiti Dinar which is the most expensive currency in the world. There are other that varies but are not as strong as this one. Kuwait has strong economic practices and policies that make its currency the most powerful and the world and has continued to stay as such for quite some time now. For useful information keep visiting Aedrio.