Currency – The World’s Best and Worst of All Time
We see and hear about the fluctuations in the currency market every day, so we got thinking; which currencies rule the roost and which have done so badly that they’re no longer in circulation? We thought we’d look into it, so we’ve put together a list of some of the best and worst currencies of all time.
The highest-valued currency unit is the currency in which a single unit buys the highest number of any given other currency, or the largest amount of a given good. Most commonly, the calculation is made against a major reserve currency such as the euro (EUR), the pound sterling (GBP) or the United States dollar (USD).
Currently, the top 10 highest valued currencies against the US Dollar are:
1. Kuwaiti Dinar – 1 KWD = $3.65
The Kuwait currency is currently the world’s highest valued currency against the US Dollar, mainly due to their large scale oil production. Pegged to the dollar, on Kuwaiti Dinar is worth $3.65
2. Bahraini Dinar – 1 BHD = $2.66
Much like Kuwait, Bahrain’s industry relies on the production and refining of oil, as well as financial services and construction. With an exchange rate to the US dollar at around $2.66 for one Bahraini Dinar, it’s the second most valuable currency in the world.
3. Omani Rial – 1 OMR = $2.60
Oman, yet another country known for their oil production, has the third highest-valued currency unit in the world; with one Omani Rial cashing in at $2.60.
4. Latvian Lats – 1 LVL = $2.135
Latvia has entered the process to phase out the Lat in favour of the Euro. However, this doesn’t detract from the fact that 1 Lat it worth $2.14.
5. UK Pound Sterling – 1 GBP = $2.068
The GB pound is the fourth most traded currency in the foreign exchange market, after the US dollar, the euro and the Japanese yen.
6. Jordanian Dinar – 1 JOD = $1.40
Another Arabian country has made it into the top ten, with one Jordanian Dinar equalling $1.40.
7. Azerbaijani Manat – 1 Manat = $1.27
A former Soviet state embroiled in internal conflict after its independence from the Soviet Union, Azerbaijan’s future looks bright because of its large oil reserves and growing interaction with Western economies.
8. European Union Euro – 1 EUR = $1.26
The Euro is the second largest reserve currency, as well as the second most-traded currency in the world after the US dollar. As of February 2012, with more than €890 billion in circulation, the Euro has the highest combined value of banknotes and coins in circulation in the world, having surpassed the US dollar. Alongside the US dollar, these two currencies account for nearly 90 percent of the foreign exchange reserves held by central banks and governments.
9. Cayman Islands Dollar – 1 KYD = $1.20
With no direct taxation, the islands thrive as an offshore financial centre, with hundreds of banks, insurers and mutual funds.
10. Swiss Franc – 1 CHF = $1.10
The currency and legal tender of Switzerland and Liechtenstein. The Swiss franc is the only version of the franc still issued in Europe. The Swiss National Bank issues banknotes and the federal mint issues coins.
So those are some of the highest valued currencies around right now. And the worst? We look into five currencies that bombed and are no longer in circulation…
Argentina’s economy enjoyed record growth until the OPEC oil embargo in the mid-70s. Civil and political unrest followed, and budget and trade deficits threatened the onset of a severe recession in the South . Rather than reduce spending or institute temporary borrowing to cover the shortfall, the government thought it would be a better idea to print money instead. A military coup in 1976 brought further economic decline and more inflation, as the money supply continued to expand. By 1982, GDP was spirralling downwards and dropped 12% year over year, the worst since the Great Depression. Inflation was rampant as the money denominations kept adding zeros until the new peso was established to stabilise the currency. In the end, one new peso was equal to 100 billion of the original pesos (pre-1983).
Upon gaining independence in 1980, the Zimbabwe dollar was valued about 25% higher than the U.S. dollar at the time. However, many problems led to economic decline over the following years. As in Argentina, a military coup attempt created more instability and lack of confidence in the financial system. Government spending escalated, meaning that wage and price controls were implemented, producing massive budget deficits. The printing presses started rolling and rampant inflation took hold. It reached 624% in 2004 and 1730% in 2006. A year later, inflation zoomed to 11,000% and money was denominated in increments of 100 million dollars. This was quickly replaced by a 500 million dollar bill that was equivalent to about 2.5 U.S. dollars. In 2008, the money was replaced by a new dollar that was equal to 10 billion of the old dollars.
Originally a hot spot for foreign investors, Peru embarked on a program of increased public spending in the 1980s without a plan for dealing with the resulting debt. Investment dried up as liberal trade policies slowed growth, and inflation started to rise. In 1985, the government replaced the Sol with the Inti at an exchange rate of 1,000 to 1. The largest denomination of the new bill was 1,000 Inti note. By September 1990, monthly inflation had reached 400% and a 10 million inti note was created to deal with hyperinflated prices for goods and services. Only six years after its creation, the Inti was replaced by a new version of the Sol with a conversion rate of one billion to one.
Between 1988 and 1989, the Yugoslavian Dinar’s largest denomination switched from 50,000 to 2,000,000 notes. The New Dinar replaced the Dinar in 1992, at a rate of 1 to 10, with the highest denomination being 50,000. By 1993, this was 10,000,000,000. In answer to this sharp increase inflation, the government simply removed six zeros, meaning that the “Newer” Dinar replaced the “Old Dinar” at a rate of 1 to 1 million. In the next year the currency was replaced yet again, this time at the rate of 1 to 1,000,000,000! By January 1995, prices had increased a quadrillion percent in two years. It is estimated that during the height of hyperinflation (December 1994), inflation was increasing by a rate of 100% per day.
The Great Depression put an initial strain on the Austrian Pengo, originally introduced with great strength as a replacement to the Austrian-Hungarian Korona in 1926, per the Treaty of Versailles. The effects of World War II would run their course and in 1944, the Hungarian Pengo’s highest denomination was the 1,000 note. A year later it was 10,000,000, and by mid-1946, it was 100,000,000,000,000,000,000. Realizing that this type of hyperinflation and denomination increase was not sustainable, and after 20 short years, the Pengo was replaced by the Forint. There are famous pictures of this event, which include street sweepers cleaning the sea of Pengo notes that Hungarians so eagerly discarded. At the time of this replacement, the Pengo to Forint exchange, was Four Hundred Octillion (That’s 29 Zeros) to one. That same Forint would exchange for 11.74 to $1USD. Inflation has since continued at a much more subdued rate, and the current exchange is valued at approximately 195.2 Forint to 1 $USD.