Learn about the 10 strongest currencies in 2023

The US dollar is often viewed as the world's strongest currency, and indeed, the greenback is the most widely traded currency of all, but you may be surprised that it is not the strongest currency.

Currencies are traded in pairs. For example, you buy the dollar against your country's currency or any other local currency at a specific price. Each currency is priced against a basket of different currencies based on supply and demand at what is known as the exchange rate.

But some central banks fix the exchange rate of their currency at a specific level to protect it from fluctuations, increase the attraction of deposits in their local banks, and achieve a degree of financial stability, so the rise in the value of the local currency does not necessarily indicate the strength or size of the country’s economy.

Below are the 10 strongest currencies in the world in 2023, with the US dollar installed as the standard.

1. Kuwaiti dinar

The Kuwaiti dinar sits at the top of the list, as the price of one dinar is 3.23 US dollars, and Kuwait's economy depends mainly on oil revenues, making it one of the richest countries in the world.

The Kuwaiti dinar was introduced in the 1960s and was linked to the British pound at that time, before being linked to the US dollar from January 5, 2003 until May 19, 2007, according to the Central Bank of Kuwait website.

Starting from May 20, 2007, the exchange rate of the Kuwaiti currency was linked to an undisclosed basket of international currencies of the most important commercial and financial partners of the State of Kuwait, with the aim of preserving the purchasing power of the national currency and containing inflationary pressures on the local economy, according to the bank’s website.

2. Bahraini dinar

The Bahraini dinar comes in second place after the Kuwaiti dinar, with a price of 2.65 US dollars. Like Kuwait, Bahrain relies heavily on the export of oil.

The Bahraini dinar began trading in 1965, and its value is linked to the US dollar. Stabilizing the exchange rate of the local currency against the dollar is the basic pillar of the bank’s monetary policy, which aims to maintain currency stability, low inflation rates, and provide an attractive investment environment at the local and global levels, according to the Central Bank of Bahrain’s website.

3. Omani Riyal

One Omani riyal can buy 2.60 US dollars.

Oman is located in the Arabian Gulf region, and like its neighbors, it is considered a major source of oil and gas exports. The Omani riyal was introduced in the 1970s, with it linked to a fixed rate against the US dollar.

4. Jordanian riyal

The value of the Jordanian riyal is equivalent to 1.41 US dollars.

The Hashemite Kingdom of Jordan is located in the Arabian Gulf region, but unlike other Gulf countries, Jordan is less dependent on oil and gas exports, and suffers from an economic slowdown and high debt.

The Jordanian dinar has become the official currency of Jordan since 1950, and the rise in the value of the Jordanian currency is due to pegging its price to the US dollar in a way that gives it stability and contributes to attracting deposits to Jordanian banks.

Therefore, the strength of the Jordanian currency is due primarily to its peg to the dollar, and not to the strength of the national economy.

5. Sterling pound

The British pound is the fifth strongest currency in the world, as it buys 1.22 US dollars, and this may not be surprising as Britain is the sixth largest country in the world in terms of gross domestic product, according to the World Bank. The pound sterling was first introduced in the fifteenth century AD, and is traded. It is freely available and therefore its value does not depend on other currencies.

6. Cayman Islands dollar

The Cayman Islands are a British territory in the Caribbean. The Cayman Islands dollar is equal to 1.20 US dollars. It began trading in the 1970s and is also linked to the US dollar.

The Cayman Islands offers many incentives to attract investors, although it faces accusations of facilitating money laundering and illegal financial practices.

7. Swiss franc

The Swiss franc is the official legal tender of Switzerland and Liechtenstein and is usually viewed as a safe haven due to Switzerland's political stability.

The value of the Swiss franc occupies eighth place on the list of the most expensive currencies in the world, as the value of the Swiss franc is 1.10 US dollars. It was introduced in 1850, and was later linked to the euro, but only for a short period before moving to free floating.

8. euro

One euro buys 1.05 US dollars, and it ranks ninth among the most valuable currencies in the world. The euro is the official currency of the eurozone, which includes twenty of the twenty-seven European Union countries.

Trading in the euro began in 2002, and its value is subject to supply and demand.

9. US dollar

Despite being the most widely traded currency in the world, the US dollar ranks tenth among the 180 official currencies in the world in terms of value.

The US dollar began circulating in the eighteenth-century AD, and it is the official currency of the United States of America and its provinces.