The U.S. dollar is one of the most valuable currencies in the world and is the lender of choice for many countries that want to buy dollar-denominated U.S. bonds.
Due to inflation, some powerful currencies, like the Japanese yen (JPY), decreased in value but the dollar remained one of the strongest currencies and has not depreciated over time.
However, there are some currencies that outperform the USD despite the USD’s reputation as a reliable currency. This suggests that the value of the foreign currency is greater than $1 per unit. However, just because one currency is worth more than another does not necessarily mean that the other country’s economy is larger or stronger. A variety of factors, including the amount of cash in circulation, cause exchange rates to be fixed.
Here are the countries and their current exchange rates that are stronger than the US dollar.
Cayman Islands Dollar: 1 KYD = 1.20 USD
The value of the Cayman Islands is backed by the country’s status as a tax haven. In the 1970s, the Cayman Islands dollar (KYD) was fixed to the US dollar at 1.20. The country is a tax haven may seem like a simple way to increase a currency’s value above the value of the dollar, but it is not always the case.
Maintaining a currency peg can be challenging when the local economy is struggling and interest rates in the US are rising.
British Pound: 1 GBP = 1.24 USD
Over the past decades, the policymakers of the Bank of England (BOE)have generally kept up with developments in other nations. They have managed to keep the pound worth more than the dollar.
In the past, the British pound (GBP) was more valuable than the dollar. Nevertheless, it fell against the USD for the majority of the 20th century. In the 1980s, this decline stopped, and the British pound once again outperformed the US dollar.
Jordanian Dinar: 1 JOD = 1.41 USD
The Jordanian Dinar (JOD), like the Cayman Islands Dollar, has been pegged to the US dollar at a higher value. The hope was that a stable exchange rate would help Jordan attract US investment.
As indicated earlier, any country can peg its currency to the dollar at any value. To maintain the peg, the currency must maintain its value relative to the US dollar. Jordan accomplished this during the first two decades of the twenty-first century.
Omani Rial: 1 OMR = 2.60 USD
Oman is another country that has fixed its currency’s exchange rate with the US dollar (1 OMR = 2.60 USD). Due to Oman’s oil production and its historically tight monetary policy and financial restrictions, the Omani rial (OMR) has maintained its value against the dollar.
Omani policymakers have generally restricted the country’s money supply in order to protect it from war and conflict in the Middle East. This has had an effect on the country’s inflation rate. Furthermore, lending practices in Oman tend.to favor risk-averse businesses and ventures.
Bahraini Dinar: 1 BHD = 2.65 USD
The Bahraini dinar (BHD) was pegged to the US dollar and was slightly more valuable than the Omani rial. Despite the significant impact that low oil prices had on Bahrain’s economy, the yearly average of the Bahraini dinar has remained close to its current exchange rate since 2011. Bahrain’s inflation rate was also moderate and stable.
Kuwaiti Dinar: 1 KWD = 3.26 USD
The Kuwaiti dinar (KWD) is frequently the most valuable foreign currency, and it is not pegged. Significant oil production has contributed to Kuwait’s wealth and the value of the Kuwaiti dinar.
Kuwait has amassed a sizable sovereign wealth fund over the years. The Kuwait Investment Authority manages this fund, which has contributed to Kuwait’s continued prosperity.