Which is the most valuable currency in the world?

1 Answer

Currently, Kuwaiti Dinar (kwd) is considered as the highest and most valuable currency in the world. Kuwaiti dinar leaves behind even the strongest currencies such as United States dollar and Great Britain’s pound. Kuwait monetary system is based upon the fixed rate management, that's why the value of the Kuwaiti dinar does not fluctuate much. 

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Kuwait is known as one of the major oil exporters. Kuwait has around 104 billion barrels of reserve of crude oil if you estimate this reserve that it is to be around world's 10% reserve. Kuwait economy earns around 70-75% of its income from the oil export. Petrochemicals and petroleum generally account 43% of the country's GDP and brings 90% of the export revenues. Kuwait generally imports the basic items of food products as well as machinery to textile goods. 

Hence, Kuwait earns most of the profit by pegging the rate of exchange at the high level, so by keeping the rates high, they earn more income from exports than they spend on import goods.  

Some reasons that lead the Kuwaiti Dinar in terms of value are:

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  • Kuwait’s currency has a fixed rate, so because of it Kuwaiti dinar able to sustain its high value without getting directly affected by the demand or supply of market.

  • Kuwait also has a developed system of banking which is able to maintain the fixed rate. 

  • Kuwait is a tax-free country which attracts the foreign investors to put and invest their money in Kuwait.

Another reason behind its high rate of currency value is because they have a much lower rate of inflation along with interest rate. Government debt is also very low and that's why Kuwait is also one of the richest countries in the world.

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