What is the strongest currency in the world?

The US dollar is the strongest currency in the world

The US dollar is considered the strongest currency in the world, that is, the most stable global currency, capable of withstanding global financial crises; Many people and international governments resort to celebrating it in times of crisis and economic turbulence; This is due to a number of economic reasons, as follows:

• Banks and central banks in most countries around the world have the US dollar as the largest unofficial global reserve currency, with IMF statistics as of the end of 2019 indicating that the US dollar makes up about 60% of the reserves. total central bank reserves. A well-known foreign coin.

• Trade and commerce in US dollars is not limited to financial transactions in the United States of America only, rather the US dollar is distinguished by its ability to trade around the world, especially in the former Soviet Union and countries.   Note that the volume of US dollar trade worldwide was estimated at $1.671 billion, and according to 2018 economic statistics, half of this trade took place outside of US markets.

•  stability in economic policies and the political climate in the US; Which plays an important role in supporting the value of your currency.

• Consider US Treasuries as a form of safe international debt; This is because you rely on full and timely payment. According to statistics from the International Monetary Fund at the end of 2019, 40% of the total world debt is issued in US dollars; For this reason, foreign banks tend to inject large amounts of US dollars; This makes it the most redeemable currency; In order to facilitate the work of world trade.

The dominance of the US dollar as a global reserve curreny

• The United States of America supported allied countries during World War II in exchange for gold. Which made it the largest holder of gold in the world at the time, and after the end of the war, many countries tended to peg their local currency to the US dollar; Since then, the US dollar has become a global currency and has become the world's largest reserve currency to date.  

• currency; Representatives of 44 allied nations met in Bretton Woods, New Hampshire, USA in 1944.  In order to come up with a new global financial system for handling global currencies, and after this agreement, it was decided to stop linking the currencies of the countries of the world to gold and peg them to the gold-pegged US dollar.   Thus, the US dollar evolved from a national currency to a global reserve currency.

•  In the early 1970s, the US government decided to stop pegging its currency to gold, after countries increased their demand for gold in exchange for their US dollar. In this way, the attempt to put an end to global inflation, given that the decoupling of the US dollar from the gold standard led to the emergence of the so-called floating currency; That is, currency exchange rates are not fixed, but rather float in a changing way.  markets, the US dollar remains the world's largest reserve currency despite leaving the gold standard.

An introduction to the US dollar

The United States dollar currency is abbreviated with the global symbol (USD) or the official symbol ($) or ($US), keeping in mind that one United States dollar is divided into 100 cents, and the United States dollar was issued in the financial markets with the.  The current form was first introduced in 1914 AD. C., [3 The Federal Reserve Bank is responsible for issuing US dollar bills and coins, which are currently available in the form of seven bills: 1, 2, 5, 10, 20, 50 and $100, while the version different set.  Of the denominations of the dollar and its parts in the form of coins for daily trade in various commercial transactions in the form of six denominations of metal, namely: one cent, 5 cents, 10 cents, a quarter (25 cents)) , half dollar (50 cents) and one dollar.

Countries that adopt the US dollar as their official currency

The US dollar is the official national currency of the United States of America and is the most widely used national currency on the North American continent; It has official circulation in most of the countries of the continent, as well as in some countries and territories of the Caribbean and Central America, where five United States territories and seven independent countries have the United States It should be noted that the US dollar is the most traded currency in the world, based on trading volume in the forex currency market, according to statistics from the Bank for International Settlements for the year 2019 AD, which indicates that the daily trading volume The average US dollar for the year 2019 was approximately US$2. 9  that the foreign exchange market is the largest financial market in the world; The total average daily trading volume is estimated to be around $6.6 trillion.