Last Updated on February 2, 2021 by Ope Quadri
Summary: We’ll tell you why Kuwait Dinar remains valuable than the US dollar, the most widely circulated and traded currency on forex and why KWD has maintained the number spot for several years.
- 1 KWD to USD=$3.27
- 1KWD to GBP=2.52 GBP
- 1KWD to Euro=2.78 EUR
The value of Kuwaiti Dinar which was first issued in 1961, is 3.30 dollars. It is considered the most valuable currency due to its stable value, as it’s not subjected to supply and demand.
Kuwait ended the link between its Dinar and the US dollar since 2007 and connected the currency with the value of a package of currencies.
Today, 1KWD will buy 3.27 US dollars. Its value isn’t just limited to the USD, but against other currencies globally.
The myth about the US dollar
There is a widely circulated myth that the American Dollar holds the highest monetary value among all currencies in the world, but the fact is USD isn’t the most valuable currency in the world.
In actual sense, there are some Arab currencies that perform better than the USD in terms of value or exchange rate. KWD, Bahraini Dinar, Omani Riyal and Jordanian Dinar are some of them that worth more than the US dollar.
In one of our previous posts, we shared with you top 40 most valuable currencies in the World against the Nigeria Naira, good enough, some of them are also doing far better when paired with the American dollar.
Why Is Kuwaiti Dinar More Valuable Than US Dollar?
The strength of a currency is determined by the rate of international market demand. The Kuwait Dinar is in high demand because of its wealth of oil. Since oil is in such high demand, many countries need the Dinar to purchase oil which drives up the exchange rate.
Several factors give KWD advantage over the USD, Euro, Pounds and other currencies around the World.
- Major Exporter Of Oil.
- Sound Utilisation Of Oil Revenue
- Pegging Their Exchange Rate At a High Level
Number one, Kuwait is a major exporter of Oil. A few years ago, it is estimated that Kuwait has crude oil reserves of 104 billion barrels (15 km³), estimated to be 10% of the world’s reserves.
Two, Kuwait economy earns the 75% part of its income from oil which its leaders have consistently utilised to develop its economy.
Three, being a tax-free country, Kuwait’s oil industry accounts for 75% of government revenue: petroleum and petrochemicals account for 43% of GDP and 90% of export revenues while main imports remain basic necessities ranging from food products and textiles.
The above advantages enable Kuwait to peg its exchange rate at a high level as this earns them more income because their exports are much more valued than their imports.
For instance, in 2011, estimated exports stood at US$94.47 billion and imports were around US$22.41 billion.
As you can see, Kuwait didn’t get there by chance rather its leaders utilised their resources which is the country’s comparative cost advantage to boost the exchange rate of Kuwait Dinar against USD and other countries at the global market.
Is Kuwait a rich country?
Kuwait one of the richest countries with a GNI per capita of $72,872 with its major revenue on oil. Its 2017 GDP stood at $271.1 billion (57th out of 196 countries ranked) with a 4.1 million population.
Kuwait is a tiny oil-rich country with a population of 4.1million people. It has other Arabian countries like Saudi Arabia, Iraq and Iran as neighbours.
The strongest currency in the world and the most valuable currency today is the Kuwaiti Dinar, it isn’t the American dollar, not the Euro, not the Swiss Franc, nor the British Pound.