How does Kuwait currency work? Let me introduce you to the Kuwaiti Dinar, officially the strongest currency in the world! We’re going to go over the various denominations and what features on them, its value compared to other major currency (valued at the time of writing), we’ll explore briefly the history of the Kuwaiti Currency and the Kuwaiti Dinar (KD), as its creation was linked to the Indian Rupee and the effects on the currency during and after the Iraqi invasion. However we’re first going to go over the country Kuwait.
To read about the worlds strongest currencies click here.
History of Kuwait and Kuwaiti Currency
The state of Kuwait is located at the tip pf the Persian Gulf, it has two large neighbours; Iraq to the north and Saudi Arabia to the south and has a maritime border with Iran (basically all the cool kids).
Historically Kuwait was a part of Mesopotamia and was vital for sea trade between Persia and India, the ancient history is so in-depth and defiantly worth reading about. The discovery of oil reverses enabled the country to modernise; even today it has an amazing modern skyline. Last year’s population results indicates Kuwait has 4.45 million people living there with 3 million of them being foreign nationals. Most of population resides in urban areas.
The economy is based on exporting petroleum exports, a positive result of this lucrative natural resource allows Kuwaiti nationals to receive free healthcare and education (resulting high literacy rates in the area). Modern roadways and public transports which consist of buses as there’s no rail network and two airports. Also Kuwait has presence in the space industry, a rich historical past and a promising future!
Kuwait currency – Introduction of the Kuwaiti Dinar
Initially The Gulf Rupee was the currency used in Kuwait and its neighbouring countries. It was equal to the Indian Rupee and initially equivalent to £1 (GBP). However there was large amounts of gold smuggling from the Gulf (particularly from Kuwait and Bahrain), where they would exchange the gold for the Indian rupee then return to the Gulf exchanging the Indian rupee for more valuable foreign currency, to buy more gold and repeat the process.
This resulted in serious exhaustion of foreign cash reserves at the Indian reserve bank, as a direct response to the gold smuggling operations the Indian government devalued the Gulf rupee against the Indian rupee in June 1966. This led to the introduction of the Kuwaiti Dinar in 1961.
Images of the obverse and reverse of the 1 Gulf Rupee banknote
Iraqi invasion of Kuwait
On 2nd august 1990, Kuwait larger neighbour Iraq conducted a military operation resulting in the occupation of Kuwait for seven months. Ultimately this would be the start of the first Gulf War ending with a US led coalition which ousted the Iraqi forces and liberation of Kuwait was declared on the 28th February 1991.
Want to see Iraq for yourself? Check out our Iraqi and Middle-Eastern Tours.
During Kuwait occupation, large sums of KD were stolen by Iraqi forces; these were the third series of Kuwaiti currency, therefore after liberation and within a year the government voided the series and issued the fourth series as quickly as possible to help avoid losses and restore the economy and faith in Kuwaiti Currency
To read about the very brief Republic of Kuwait click here.
Current Kuwaiti banknotes
Currently the Central Bank of Kuwait is on its sixth series of Kuwaiti banknotes which were released in June 2014. What I find fascinating about the current series is that the banknotes have a coarse texture to it, which allows blind people to identify each denomination by touch and feel.
My personal favourite is the 1 Kuwaiti Dinar banknotes, overall it’s grey in appearance which allows the bright blue, red and green coloured features really stand out. It features the Grand Mosque which happens to be the largest mosque in Kuwait. Also it features a bateel dhow ship, a traditional sailing vessel unique to Kuwait. On the reverse there are many illustrations of the remains of ancient Greek architecture, which can be found on Failka Island. Which is valued at 3.03 Euro and 3.27 USD.
Images of the obverse and reverse of the 1KD banknote
I’ve not seen current banknotes with the value of ¼ are ½ there currency, which I find really unique to the Kuwaiti Dinar. Here are the rest of the current series and value against the Euro and US Dollar;
¼ KD is brown featuring the liberation tower and a dhow ship and on the reverse displays a traditional Kuwaiti door. It’s valued at 0.76 Euro and 0.82 USD.
½ KD is green featuring Kuwait Tower and a dhow ship and on the reverse display oceanic wildlife featuring a hawksbill sea turtle and a silver pomfret fish. It’s valued at 1.51 Euro and 1.64 USD.
5 KD is purple featuring the Central bank of Kuwait headquarters and the reverse displays and oil refinery and tanker. It’s valued at 15.12 Euro and 16.37 USD.
10 KD is pink featuring the national assembly of Kuwait and a sambuk dhow ship. On the reverse displays a falcon and a camel with a saddle. It’s valued at 30.26 Euro and 32.74 USD.
20 KD is blue and highest denomination of the series; it features Seif Palace and a dhow ship. On the reverse displays a Kuwaiti pearl diver and dhow ship. It’s valued at 60.52 Euro and 65.49 USD.
Kuwaiti Currency Today
Although the Kuwaiti Dinar is the strongest and most valuable currency, it doesn’t necessarily mean the cost of living is much higher than other countries such as Norway, Switzerland or Bermuda. Looking at some articles Bermuda looks like it’s going to be the most expensive country to live in 2024 due to the high cost of living, rent and high import duties.
Personally I’ve not visited Kuwait or own any Kuwaiti Dinars in my currency collection. Therefore I can’t comment on its unique security features. It would be interesting to visit Kuwait one day hopefully, and learn more about this fascinating Gulf country. Also I wonder if the Kuwaiti dinar feels coarse and thick similar to the United States dollar or Japanese Yen or thin and textured like the Falkland Island pound. I wonder if there is any unique customary way currency is handled in Kuwait, for example not directly handling currency but using a tray instead, like in Latvia or in India, where currency is only handled between the cashier and customer using the right hand as using the left is considered an insult.
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