US Dollar

Top 10 Strongest Worlds Currencies

There are almost two hundred countries in the world, but that doesn`t mean that every one of them has their own currency. There is a fact that one currency can be used in several, even as the main currency. A high majority of people believe that currencies like the European currency Euro, US dollar, or UK Pound are the strongest one. We are going to present you with the top 10 currencies of the world and the honorable mentions.

Currency No.10 – Canadian Dollar (CAD)

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When we are talking about the Canadian Dollar, we are talking about the fifth largest reserve of all currencies in the world. Some are calling it Loonie, due to the picture of the bird in the one-dollar coin.

Currency No.9 – US Dollar (USD)

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Maybe it is not the world`s powerful currency, but it is the world`s most influential one. Some economists are calling it the World Reserve Currency. That means that you can pay with dollars in most of the other countries.

Currency No.8 – Switzerland`s Franc (CHF)

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Swiss is a very wealthy country. Also, they have one of the most stable currencies in the world. They probably have the most efficient bank system in the world. It is called the Bank Secrecy. Their biggest export product is high technology devices.

Currency No.7 – European Euro (EUR)

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After the collapse of the German previous currency, Euro emerged as a possibility for all of Europe. And over the years, it has grown drastically. The reason is that it is the official currency in several economically developed countries on the European continent.

Currency No.6 – Cayman Islands Dollar (KYD)

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The Cayman Islands can thank for their high currency to them being one of a few world’s heavens for taxes. The country itself is supporting various banks that are working inside it.

Currency No.5 – British Pound Sterling (GBP)

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It is often mistaken that GBP is the world`s strongest currency, but that is not the case. At least it enters the top five. It is the official currency in all of UK, and in the large part of British Crown Commonwealth.

Currency No.4 – Jordan Dinar (JOD)

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When it comes to Jordan, and its currency, it is not easy to explain how they have such a strong one. The country lacks most of the essential resources and it isn`t economically developed like their neighbor countries.

Currency No.3 – Oman Rial (OMR)

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Oman is located on the Arabian Peninsula, just beneath Saudi Arabia, and near Yemen. Due to its location, the population of Oman has real quality and wealthy life. The currency is so high that they have ½ and ¼ banknotes.

Currency No.2 – Bahraini Dinar (BHD)

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After Kuwait, we have another Persian Gulf country, Bahrain, with the population slightly over one million people. Naturally, like the previous one, their biggest profit comes from oil export into the world market.

Currency No.1 – Kuwait Dinar (KWD)

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Kuwait dinar is the world`s strongest currency. It comes from a very small country that accumulated massive amounts of wealth. The reason is their very significant export of oil into the world`s market.

Honorable Mentions

Now, we will talk about currencies that didn`t make our top ten.

Australian Dollar (AUD)

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The new design of the Australian dollar is pretty interesting to see. However, Australia prepares itself for a world without cash. We will see how this will turn up at the end.

Azerbaijani Manat (AZN)

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Azerbaijan is a country that has one of the lowest levels of unemployment. It is slightly weaker than the US Dollar.

Libyan Dinar (LYD)

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Libya`s currency has tokens named Dirham. It is very interesting to know that 1 Dinar equals 1000 Dirham. Usually in world currencies, one equals a hundred.

Is the High Value of Currency Representing Strong Economy?

We all know that countries who are not economically developed have their currencies decreasing. On the opposite, that is not the case. The country that has its economy and currency growing by the day is not profiting. The reason is, the more powerful currency, the population tends to save it, instead of spending it on a daily basis.

We can give you the Japan example. Even they have one of the strongest economies in the world, their currency is a very small one. $1 equals 109.77 Yen. The information about currencies is used by investors to make their investment plan for a certain country. Naturally, they are choosing the most stable ones. It is simple logic.

Russia and China are Killing US Dollar

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According to Russian Foreign Minister Sergei Lavrov, countries which are under the sanctions should start doing business in their national currencies, as he suggested on Tuesday. Other than Russia, countries which can opt for such a move are also Iran and Turkey, and this means that the days of the US dollar as the international reserve currency could come to an end.

The person who will be the happiest about it is President Donald Trump. Why Trump?

Yale economist Robert Triffin explained in the 1950s that when a currency is the international reserve currency, it runs a current account deficit. In case of a replacement, it is more likely to have trade surpluses, which is what happened when the US dollar replaced the British pound in the 1920s and which is what POTUS aims for.

Currently, all over the world, nations use the dollar as the currency to trade with each other. When purchases oil from Iran, they use the US dollar to complete the transaction. Basically, more US$ flow out of the country than it flows in and that creates a big current account deficit.

With the dollar as the international reserve currency, we have a thing called “monetary seignorage.” In other words, it is what the US government earns with all of those dollars circulating around the world, outside of the US. It is a minimum cost to print money whereas countries which use $ such as China and Russia pay the full value of it in goods and services.

But not everyone wants to see the dollar as the world’s currency. As China claims, the international role of the US dollar was one of the things that caused the financial crisis ten years ago. There was a chance back then for another currency to replace it, but none did.

Let’s jump to the present. Last week, Trump reimposed sanctions on Iran and he said that any company which is doing deals with the Iranians in dollars would also be hit by sanctions. Also under sanctions are several Russian companies.

Lavrov visited Turkey and he told at the press conference that “unilateral enforcement measures are illegitimate in international affairs,” which is a clear reference to the sanctions imposed by the USA. “One way to counter these illegitimate barriers and restrictions is we can use national currencies on our bilateral trade,” he concluded.

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According to Lavrov, Russia has already switched to local currencies when they strike trade deals with countries such as China and Iran. He also believes that a large number of other countries will start doing the same. “I strongly believe that abuse of the role the U.S. dollar plays as an international currency will eventually result in its role being undermined,” Lavrov said. “A growing number of countries — even those not affected by US sanctions — will more and more stay away from the dollar and will rely on more reliable partners using their (own) currency.”

To some extent, Lavrov is right. But will the Chinese be content when they receive the payment in Turkish lira, knowing that the currency will be worth much less by the time the ship reaches its destination? What the US dollar has that no other currency can guaranty: It is safe, dependable and easy to exchange.

We mentioned that this change in role for the US$ is making Trump happy. While he may be thrilled with lower trade deficits because the dollar loses its role of being the international reserve currency, this is not going to happen soon. We will still have to wait for a major change when it comes to the international currency and at the moment none can replace the US dollar.