Kuwait home to highest valued currency with strong purchasing power
Kuwait is home to the highest-valued currency, the strongest in terms of purchasing power, and the most stable in the world, not to mention that it is one of the richest countries in the world in terms of per capita GDP. It is also one of the largest oil producers in the world, the British Daily Express newspaper pointed out.
The paper noted that the Kuwaiti dinar is linked to an undeclared basket of weighted currencies, which consists of a portfolio of currencies from various countries that have significant commercial and financial relations with Kuwait, and it is believed that its composition is highly weighted towards the US dollar.
The Central Bank of Kuwait regulates the money supply in line with the country’s economic needs, supports the value of the Kuwaiti currency and during the 2008 financial crisis, took measures to protect the economy and the value of the currency, including injecting capital into banks and guaranteeing deposits.
The Kuwaiti currency derives its solvency through several factors, including economic strength, political stability, and a low trade deficit. If the country has a growing and stable economy, this attracts foreign investment and thus helps increase demand and enhances the value of the currency.
The newspaper said that the exchange rate of the Kuwaiti dinar as of December 2023 was about $3.25, and while the Kuwaiti economy depends largely on oil, the country before its discovery was dependent on fishing, pearl hunting and trade, and trade in general.
The newspaper added that since the discovery of oil in the last century, Kuwait has witnessed rapid development, and industries based on oil and petroleum derivatives currently contribute about 90% of government revenues, and since it relies heavily on the oil industry, there has been no need to devalue the currency to support non-oil exports, which is worth about $440 million.
The Daily Express continued that since Kuwait is one of the largest oil exporters in the world, and in light of the global demand for oil remaining very high, the demand to pay for it is also high, and this makes the Kuwaiti dinar a currency of great value.
“Since oil resources are vulnerable to depletion, it will be interesting to see how the Kuwaiti economy is managed if a need arises to reduce the country’s dependence on oil and find alternative sources of income,” said the daily.
Moreover, Kuwait has one of the lowest unemployment rates in the world. While it was expected to reach 2.2% at the end of 2023, this rate was much lower than its counterpart in the United Kingdom, which reached 4.2% during the same period.
Kuwait also applies a system of tax exemptions and has a fixed exchange rate for its currency of about $3.32, which helps maintain its value and provide stability despite the fluctuations in global markets. The newspaper concluded by saying that as a result of the country’s wealth, Kuwait City has now become a city that rises in the sky.
