CURRENCY IN THE WORLD :THE KUWAITI DINAR

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The Kuwaiti dinar (KWD) is the official currency of Kuwait. The name dinar originated from the Roman denarius. The KWD is subdivided into 1,000 fils, these fils are coins used in many Arab countries. It is the most powerful currency in the world.

After Kuwait gained its independence from the United Kingdom, the Kuwait currency board was created for the purpose of creating a Kuwaiti currency. The Kuwaiti dinar was introduced in 1961 to replace the Gulf rupee. The gulf rupee was pegged to the British pound sterling (GBP), it was for use outside of India, particularly in the Persian gulf regions. Both currencies circulated and were in use until 1966 when the rupee ended because of its devaluation.

The Kuwaiti dinar Bank note has had six official issues since its circulation in 1961, and also two commemorative sets circulated. In 1990 when Iraq invaded Kuwait, the Iraqi dinar replaced the Kuwaiti dinar as the national currency and the invading forces stole large quantities of bank notes. After Kuwait’s liberation the Kuwaiti dinar was restored as the national currency, new bank series were introduced allowing previous notes and the ones stolen to be stripped off its status as a legal tender. 

The Kuwaiti dinar

Between 1975 and 2003, the KWD was pegged to a weighted currency basket which was mandated by the Kuwaiti Currency board. It was later pegged to the US dollar (USD) at 0.29963 dinars to a dollar in 2003. By 2007 it was formally re-pegged to an undisclosed basket of currency. The Kuwaiti dinar is currently worth about USD 3.29, making it the most valuable currency on earth. This title is earned based on the dinar’s value posseseds when exchanged to INR (Indian Rupee). Kuwait has been able to maintain this status because of its stable oil rich economy. 

The Kuwaiti dinar isn’t typically used as a speculative trading instrument; this is due to its relatively low volatility and limited global trade. It is a controlled currency; it doesn’t necessarily float against other global currencies by taking its price from supply and demand. The stability of the KWD and its decreased risk of inflation is enforced by the controlled currency policies of the central bank of Kuwait.

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