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Kuwaiti Dinar (KWD) – Overview, Example & Currency Costs?
Kuwaiti Dinar (KWD) is among the most expensive currencies among the world and is the official currency of Kuwait. The name dinar comes from the Latin word denarius, which means "denarius." The KWD is divided into 1000 fils, a coin that is widely used in Arab countries.
Key Points Briefly
Kuwaiti Dinar (KWD) that belongs to a small nation of Kuwait is one of the costliest currencies in the world.
The currency is tied to an unidentified basket of currencies and moves in a narrow range.
Example of a Kuwaiti Dinar exchange rate is shown below.
The Kuwaiti dinar varied between $3.27 and $3.36 between 2016 and 2019. That indicates that one Kuwaiti dinar cost between $3.27 and $3.36 in US dollars.
Let us compare the Kuwaiti Dinar another highly powerful currency the United Stated Dollar (USD) to better understand the full potential of the currency. In the time period of 2019 – 2021, the KWD ranged between the lowest point of $3.18 and to the current average value of $3.32.
This higher currency indicator of the KWD indicates that the KWD has gained market value against the weakening Dollar that has lost some of its value. This rate cannot be constant and could turn in other direction at any time.
A weakening KWD, like the year 2019, would mean that the Dollar would be the stronger value when compared to the KWD. Investors however do not trade in large numbers on the KWD due to its steady nature, that doesn’t help them make greater returns on the market on the investment. The other reason is due to the minimal interest of global market in the currency.
Know the KWD (Kuwaiti Dinar) - How was it launched?
Gulf Rupee was introduced by the British in 1959 but before that the main currency that was being used in the area was the Indian rupee.
The main currency replacement came in the year 1961 and the Kuwaiti Dinar was introduced in the market. Previously the gulf Rupee was being used in the area that was linked with the sterling. After the independence from the United Kingdom, Kuwaiti Dinar was established under the new currency law of the country.
This ruling also meant that the old currencies became redundant and only the Kuwaiti Dinar was the currency that worked in the country by the year 1966. KWD always enjoyed being linked to dominant currency basket that improved its valuation.
KWD vs USD – Why is KWD so Expensive?
The KWD was tied to the US dollar (USD) at 0.29963 dinars per dollar in 2003. This valuation was maintained until 2007, when it was formally re-pegged to an unidentified currency basket.
The Kuwaiti dinar was worth around USD 3.26 in May 2019, making it the world's most valuable currency. The currency was generally stable but fluctuated its biggest between the years from 2019 and 2021, varying between 3.18 and 3.36 USD.
Like most Middle eastern countries, Kuwait also has an oil rich economy that is dependent on petroleum products that is responsible to raise majority of the Govt. revenue. It is among the wealthiest nations with record lowest unemployment rates. Citizens of the country enjoy several tax-free benefits.
Wealth management is organized through Kuwait Investment Authority (KIA), world’s oldest sovereign wealth fund that is responsible greatly for the nation’s development and progress.
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