Which is the strongest currency in the world? What makes it the strongest?
It is clear that a lot of people are writing here without reading what other people have written. Some people have written viable arguments, but the comparison of units using XE.com is useless here. The best answer so far has been simply “Gold”. Whether he meant it as a joke, I’m not sure. A currency’s “strength” is its “value durability over time”… which, in turn depends upon its basis. There is never enough gold to suit demand, and hence, it is always valuable, which is why countries used to base their currencies upon it. The British established the first full gold standard, but abandoned it after the world wars (during the British empire, the £ sterling was certainly the strongest currency) since it was too difficult to maintain. Remember that if you’re currency is based upon gold… and gold is one of the most secure ways of holding wealth… then people don’t need to find gold to have secure wealth; they just need to buy £ sterling… which then puts the onus on the British gove
No the strongest currency in the world. All big economies are exposed to different substantial risks, e.g. excessive debts, negative trade balance, real estate buble, financial intransparency. Israeli Shekel is a good currency, since the underpinned economy is healthy, and economic policies are predictable.
Clearly the conclusion is that “strongest” is a subjective word and depends largely on how you define it. The Kuwaiti dinar has the strongest purchasing power of foreign currencies, followed by the Baraini and then the Pound… but you may need more KDs to buy a loaf of bread in Kuwait than you do Pounds to buy the same loaf in the UK. Therefore its purchasing power parity (PPP) is not as strong (comparing the price of a given good, or basket of given goods, in one country with the the price of the same given good(s) in another country. eg a loaf of bread worth 1KD in Kuwait SHOULD cost £1.72949 (using rates stated above) in the UK. If in fact it costs a lot less than this in UK, then the RD’s PPP is not as strong as that of the Pound). The Dollar is the best known and trusted currency in the world, and therefore I agree that it is probably the “safest” and most universally accepted. If this is your definition of strength, then the Dollar’s your guy. I’d probably say that the Pound mix
“…For a currency to have value, people must need to buy it in order to trade. So if the country issuing the currency makes lots of stuff that people want, its currency strengthens as people buy it to buy gadgets…” and “…There is never enough gold to suit demand, and hence, it is always valuable, which is why countries used to base their currencies upon it…” The two quotes above suggest to me that if one’s objective in searching for a strong currency is to have a currency that depends on producing stuff that the world wants to buy and that stuff has durable value and sustainable demand then the answer is the currency of countries that are the commodity warehouses to the world, e.g., Canada and Brazil to name two. In selecting among commodity countries, one might discriminate on the basis of fiscal responsibility. For example David Walker, at http://www.tcaii.org/, puts both Brazil and Canada in the 40+ category (highest) relative to his metric “fiscal space” that estimates the n
