While the Kuwaiti Dinar tops the list, several others are not far behind. Knowing about them can benefit travelers, investors, and anyone using a foreign exchange service.
What Determines Currency Strength?
A currency’s strength refers to how much it can purchase and how it’s valued globally. It often mirrors a country’s economic performance, inflation rate, and trade balance.
A strong currency typically has:
- High face value (what it says on the note),
- Large purchasing power (what you can buy with it), and
- Heavy trading volume in global markets.
Here are other key factors in determining the strength of a currency:
Economic Stability
Countries with low inflation, high GDP, and political stability usually have strong currencies. These factors attract investors and maintain consistent demand for their money.
Trade surpluses and high foreign reserves also help. When a country exports more than it imports, it creates demand for its currency. This is one reason Kuwait and Switzerland appear in the top 10 strongest currency in the world rankings.
Foreign Reserve Holdings
Holding large foreign reserves helps a country stabilize its currency and manage global economic shifts. For example, China holds over $3 trillion in reserves, while the U.S. dollar accounts for 59% of global reserves.
Oil Exports and Trade Surpluses
Countries like Kuwait and Oman have strong currencies thanks to oil exports. Selling more than they buy brings foreign currency into the country, raising the value of their own money.
Low Inflation and Sound Monetary Policy
Switzerland’s low inflation and tight financial regulations help the Swiss Franc maintain its strength. Stable prices mean people can trust their money to hold value, an essential for the one of the strongest currencies in the world.
Currency Benchmarks
Currencies are usually compared to benchmarks like the U.S. Dollar. If one Kuwaiti Dinar exchanges for more dollars than a British Pound does, the Dinar is stronger, at least at that moment. These benchmarks help determine relative currency strength.
How This List Was Compiled
To give the best tips for buying foreign currency, we determined the strongest currency in the world by reviewing up-to-date exchange rates from Open Exchange and Trading Economics. We also excluded cryptocurrencies and pegged currencies like the Cayman Islands Dollar and Gibraltar Pound to focus on genuine market strength.
Top 10 Strongest Currencies in the World (2025)
Here are the top currencies that stand tall in 2025 with their exchange rates and the economies backing them.
Kuwaiti Dinar (KWD) – Kuwait
Kuwait earns much of its wealth from oil exports, with over 3 million barrels daily. Instead of pegging its currency to just one foreign unit, it uses a basket of currencies. This method, paired with massive oil reserves, keeps the Dinar stable and strong.
Exchange rate: 1 KWD = 3.26 USD
Bahraini Dinar (BHD) – Bahrain
Introduced in 1965, Bahrain’s dinar is pegged to the U.S. Dollar. Oil exports and a favorable investment climate help maintain its high value.
Exchange rate: 1 BHD = 2.65 USD
Omani Rial (OMR) – Oman
The Rial, introduced in the 1970s, is pegged to the dollar. Oman’s strong oil economy and conservative monetary policy make this currency one of the most powerful globally.
Exchange rate: 1 OMR = 2.60 USD
Jordanian Dinar (JOD) – Jordan
Despite slower economic growth, the JOD remains stable due to its peg to the U.S. Dollar and careful financial management.
Exchange rate: 1 JOD = 1.41 USD
British Pound (GBP) – United Kingdom
The British Pound is Europe’s oldest currency still in use. It benefits from the UK’s global trade and economic influence, making it a reliable currency worldwide.
Exchange rate: 1 GBP = 1.22 USD
Gibraltar Pound (GIP) – Gibraltar
The GIP is pegged 1:1 to the British Pound. Though not globally traded, its local strength comes from Gibraltar’s economy in tourism and shipping.
Exchange rate: 1 GIP = 1.22 USD
Cayman Islands Dollar (KYD) – Cayman Islands
Known as a financial haven, the Cayman Islands attract global capital, making the KYD stronger than the U.S. dollar. It benefits from strong regulatory frameworks and low taxes.
Exchange rate: 1 KYD = 1.20 USD
Swiss Franc (CHF) – Switzerland
Thanks to low inflation and political neutrality, the Swiss Franc is a trusted safe-haven currency. Switzerland’s robust economy and strict financial controls help it maintain value over time.
Exchange rate: 1 CHF = 1.08 USD
Euro (EUR) – Eurozone
Used across 20 EU countries, the Euro simplifies trade and supports one of the world’s largest economic zones. That collective strength keeps it valuable on the global stage.
Exchange rate: 1 EUR = 1.08 USD
US Dollar (USD) – United States
While not the highest in face value, the U.S. Dollar is the most traded and most held in reserves globally. Its liquidity and global trust make it a central pillar of the international financial system.
Exchange rate: 1 USD = 1 USD
Why Some Lesser-Known Currencies Top the List
Smaller, oil-rich nations like Kuwait and Bahrain have strong currencies due to massive energy exports, savings, and economic stability. These countries often use fixed exchange rates and restrict currency outflow, which helps maintain high values. This approach minimizes sudden devaluations and makes them attractive to investors seeking reliability.
If you’re curious about the flip side, the weakest currency in the world often belongs to nations facing hyperinflation or political instability. These currencies may struggle on the global stage but reveal important lessons about the link between governance and financial strength.
Currency Strength vs. Global Influence
Just because a currency is strong doesn’t mean it dominates trade. The U.S. Dollar and Euro, for example, are widely used even though they aren’t the strongest currency in the world. Their influence stems from trade volume, reserve status, and political power.
For example, the U.S. Dollar makes up 59% of foreign exchange reserves. This gives the U.S. an edge in borrowing and global finance. Similarly, the Euro is used by 20 EU nations and recognized in over 60 countries, making it highly influential.
Is a Strong Currency Always Better?
A strong currency is not always better. It’s great for travelers and consumers because it reduces the cost of imports. But the exports can become more expensive, making it harder for local businesses to compete globally. This can hurt manufacturing and reduce demand for domestically made products.
While strong currencies offer perks for buyers and tourists, they can be a headache for exporters trying to sell goods abroad.
Frequently Asked Questions (FAQs)
What is the strongest currency in the world right now?
As of 2025, the Kuwaiti Dinar holds the highest exchange rate against the US Dollar.
Why is the US Dollar not the strongest currency?
The USD is the most widely used and held, but its relative face value is lower than some smaller currencies.
How often do currency rankings change?
Rankings can shift annually based on inflation, interest rates, and geopolitical stability.
Are these currencies good for investment?
Not necessarily. Exchange rate value does not always reflect growth potential or liquidity.
Does a stronger currency mean a stronger economy?
Not always. A currency can be strong due to fixed policy or low circulation, not economic size.
Is the Euro stronger than the US Dollar?
Yes, by face value, but both are considered highly stable and globally dominant currencies.
References
Forbes Advisor UK. (n.d.). Top 10 strongest currencies in the world. Forbes. Retrieved May 22, 2025, from https://www.forbes.com/uk/advisor/investing/currencies/top-10-strongest-currencies-in-the-world/
XE. (2025, February 13). What is the strongest currency in the world? https://www.xe.com/blog/currency-news/strongest-currencies-in-the-world/
Forbes Advisor. (2024, April 22). 10 highest currencies in the world in 2024. https://www.forbes.com/advisor/money-transfer/highest-currencies-in-the-world/
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