Today's Edition
SAMIHAH ZAMAN (ABU DHABI)
Kuwait boasts a robust economy underpinned by a high-value currency, with the Kuwaiti dinar (KWD) maintaining its position among the world’s strongest currencies in terms of nominal value. Beyond supporting macroeconomic stability, the currency’s strength yields tangible benefits for those living and working in the country.
The Kuwaiti dinar was first introduced as legal tender in 1961, following Kuwait’s emergence as a sovereign nation. It is administered solely by the Central Bank of Kuwait (CBK).
The Kuwaiti dinar is also distinctive among the currencies of the Gulf Cooperation Council countries as the only one in the region not pegged to the US dollar since 2007. Instead, it is pegged to a basket of currencies, with the exact composition of and weightings determined and kept confidential by the CBK.
As of January 2026, the Kuwaiti dinar has traded between $3.16 and $3.27 per US dollar on the open foreign exchange market, while its rate against the UAE dirham has ranged from Dh11.66 to Dh11.98 per dinar over the same period.
“The strategic arrangement [of pegging the dinar to a basket of currencies] allows the exchange rate to reflect Kuwait’s broader trade and financial relationships, reducing vulnerability to the volatility of any single foreign currency and providing a more balanced, stable monetary environment,” Farooq Hamadani, Treasury Manager at Lulu Exchange Kuwait, told Aletihad.
“The Kuwaiti dinar consistently ranks among the world’s strongest currencies on face value, a distinction that reflects far more than mere numerical prominence. Its strength is underpinned by prudent economic management, robust fiscal policies, and abundant natural resources, particularly Kuwait’s vast oil reserves. These factors collectively contribute to the dinar’s stability, resilience, and enduring global confidence, making it a benchmark of financial security in the Gulf region,” Hamadani added.
A strong and stable currency such as the Kuwaiti dinar undoubtedly delivers lasting benefits for the Kuwaiti economy. Hamadani explained that the Kuwaiti economy experiences reduced exchange rate volatility, which enables businesses to attract foreign capital, strengthen investor confidence, limit inflation, and maintain domestic purchasing power as well as global competitiveness. When combined, these factors deliver sustainable economic growth for the country.
Meanwhile, living and working in Kuwait remains an attractive prospect, with the high-value Kuwaiti dinar ensuring enhanced purchasing power and international mobility. The currency’s stability additionally provides security for investments and savings.
Hamadani added that the Kuwaiti dinar’s strong exchange rate helps attract world-class talent to the country, while its stability protects workers from sudden economic shocks, ensuring consistent living standards and reduced financial stress.
