Mumbai: The currency is the most basic unit of an economy. It is a medium of exchange of goods as well as a store of value. The strength of a currency also indicates the health of the economy.Forbes has released a list of top currencies in the world. The magazine also revealed the factors that made these currencies stronger.
A currency is always priced relative to another currency, known as the ‘exchange rate’ .Most currencies are ‘floating’, meaning their value fluctuates depending on demand and supply. However, some currencies are ‘pegged’, which means their value relative to another currency (such as the U.S. dollar) is fixed at an agreed rate. Exchange rates affect the cost of goods and services in a foreign currency.
Forbes analyzed the strongest currencies, based on the number of units of foreign currency received in exchange for one US dollar.
Here’s the top 10 strongest currencies:
1. Kuwaiti dinar (KWD): The Kuwaiti dinar is the strongest currency in the world with 1 Kuwaiti dinar buying 3.26 U.S. dollars or US$1 equals 0.31 Kuwaiti dinars. The Kuwaiti dinar was introduced in the 1960s.
2. Bahraini dinar (BHD): The Bahraini dinar is the second strongest currency in the world with 1 Bahraini dinar buying 2.65 U.S. dollars or US$1 equals 0.38 Bahraini dinars.The Bahraini dinar entered circulation in 1965 and is pegged to the U.S. dollar.
3. Omani rial (OMR): The Omani rial is the third strongest currency in the world with 1 Omani rial buying 2.60 U.S. dollars or US$1 equals 0.38 Omani rial.Oman is a major exporter of oil and gas. The Omani rial was introduced in the 1970s and is pegged to the U.S. dollar.
4. Jordanian dinar (JOD): The Jordanian dinar is the fourth strongest currency in the world with 1 Jordanian dinar buying 1.41 U.S. dollars or US$1 equals 0.71 Jordanian dinar.. The Jordanian dinar entered circulation in 1950 and is pegged to the U.S. dollar.
5. British pound (GBP): The British pound is the fifth strongest currency in the world with 1 British pound buying 1.20 U.S. dollars or US$1 equals 0.83 British pounds.
Britain is the sixth largest country by gross domestic product (GDP), according to the World Bank. The pound was first introduced in the 1400s before being decimalised in 1971. It is free-floating and thus not pegged to other currencies.
6. Cayman Islands dollar (KYD): The Cayman Islands dollar is the joint sixth strongest currency in the world with 1 Cayman Islands dollar buying 1.20 U.S. dollars or US$1 equals 0.83 Cayman Islands dollars. The Cayman Islands is a British territory in the Caribbean and is an offshore financial center. The Cayman Islands dollar was first introduced in the 1970s and is pegged to the U.S. dollar.
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7. Gibraltar pound (GIP): The Gibraltar pound is the joint sixth strongest currency in the world with 1 Gibraltar pound buying 1.20 U.S. dollars or US$1 equals 0.83 Gibraltar pounds. Gibraltar is located at the southern tip of Spain and is officially a British territory. The Gibraltar pound was first introduced in the 1920s and is pegged to the British pound , meaning that one GIP equals one GBP).
8. Swiss Franc (CHF): The Swiss franc is the joint eighth strongest currency in the world with 1 Swiss franc buying 1.07 U.S. dollars or US$1 equals 0.93 Swiss francs.The Swiss franc is the official legal tender of Switzerland and Liechtenstein. The Swiss franc was introduced in 1850 and was later briefly pegged to the euro before moving to a free-float.
9. Euro (EUR): The euro is the joint eighth strongest currency in the world with 1 euro buying 1.07 U.S. dollars or US$1 equals 0.94 euros. The euro is the official currency of the Eurozone, being 19 out of the 27 countries that form part of the European Union. The physical currency entered circulation in 2002 and is free-floating.
It is the second-largest reserve currency and the second-most traded currency worldwide.
10. US dollar (USD): The U.S. dollar is the 10th strongest currency in the world, worth exactly 1 against itself. All other units of currency across the globe are worth less than a U.S. dollar. Created in the 1700s, the U.S. dollar is legal tender in the USA, other U.S. territories and sovereign nations including Puerto Rico, Ecuador and Zimbabwe.
The U.S. is the world’s largest economy by GDP and the U.S. dollar is by far the most-traded currency globally. The U.S. dollar is also the largest reserve currency in the world (the currency most held by central banks) and is the currency used to price many commodities, including oil, gold and copper.
Meanwhile, according to Wednesday’s exchange rate published on the International Monetary Fund’s (IMF) website, India is ranked 15th with value listed as 82.9 per US dollar.
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