Exchange rates play a pivotal role in the global economy, influencing international trade, investments, and tourism. Understanding how exchange rates work and their impact on various aspects of the economy is crucial for businesses, travelers, and policymakers alike.
Exchange rates represent the value of one currency relative to another. They determine the rate at which one currency can be exchanged for another in the foreign exchange market, as a result, the strength of a country’s exchange rate, particularly against the dollar, highlights its leverage on global trade.
Simply put, the stronger the currency, the stronger the economy. In short, a country’s exchange rate simply denotes how well that country is performing economically. The strength of a country’s currency is direct relations to factors such as inflation, economic stability, political stability, international trade, and foreign investment, among other key economic drivers.
Exchange rates are dynamic and reflect the interplay of various economic and geopolitical factors. Understanding exchange rates and their impact is essential for businesses engaged in international trade, travelers planning trips abroad, and policymakers formulating economic strategies.
The importance of a country’s exchange rate is the reason why different countries have different rates. While some countries can boast of a very sturdy exchange rate, others simply can’t. The latter is prevalent in Africa, where a number of the continent’s currencies are amongst the weakest in the world.
However, a number of currencies on the continent boast impressive values and below are ten of the strongest. The list below is based on an update done , by FXOpen, a forex broker which procures forex brokerage services, on May 16, 2023. Of course, since then these figures have fluctuated to varying degrees, some slightly, others significantly. For example Namibia’s current exchange rate as of 7th of July 2023 is 14.89/$1, while on the list it is 19.08/$1.
The list shows Africa’s 10 strongest currencies compared to the dollar as of May 2023.
| Rank | Country | Currency | Exchange rate to the $ |
|---|---|---|---|
| 1. | Tunisia | Tunisian Dinar | 1 USD = 3.0 TND |
| 2. | Libya | Libyan Dinar | 1 USD = 4.7 LYD |
| 3. | Morocco | Moroccan Dirham | 1 USD = 10.1 MAD |
| 4. | Ghana | Ghanaian Cedi | 1 USD = 11.5 GHS |
| 5. | Botswana | Botswana Pula | 1 USD = 13.5 BWP |
| 6. | Seychelles | Seychellois Rupee | 1 USD = 13.9 SCR |
| 7. | Eritrea | Eritrean Nakfa | 1 USD = 15.0 ERN |
| 8. | Zambia | Zambian Kwacha | 1 USD = 18.6 ZMW |
| 9. | Namibia | Namibian Dollar | 1 USD = 19.08 NAD |
| 10. | Lesotho | Lesotho Loti | 1 USD = 19.08 LSL |
Source : Business Insider Africa
