The currency of a nation tells you a lot about its overall economy and society. As any economist will tell you, a strong, valuable currency with stable prices tends to indicate a stronger and wealthier national economy. Conversely, a currency that is weak, unstable, in low demand, and is constantly losing value is usually a reliable indicator of a national economy in decline.
When looking at Africa's most valuable currencies, defined in relation to their value against the US Dollar, this hypothesis largely holds true. The most valuable African currencies tend to be attached to the continent's top economic performers, while the least valuable belongs to the worst. With this in mind, read on to find out which currencies are the most valuable in Africa.
1. Tunisian Dinar
The Tunisian Dinar, which is currently valued at around 2.71 to the dollar, has been among the most highly valued in Africa for many years. Tunisia is one of the few democracies in the region, with a prosperous and rapidly growing economy based on agriculture, tourism, and manufacturing.
The Dinar also happens to be one of the most highly traded African currencies on the global forex market. Thanks to its high liquidity, globally-established online forex brokers such as INFINOX allow customers all over the world to trade the FX market. This high demand of the Tunisian Dinar also helps to bolster the underlying value of this free-floating currency.
2. Libyan Dinar
The Libyan Dinar was, until very recently, the most valuable currency on the continent. However, the Libyan Government was forced to accept a new exchange rate in January 2021 that more closely reflected black market rates. Following this, the value of the currency relative to the Dollar has nosedived by more than 75%.
Despite this almost unprecedented drop, the Libyan Dinar currently trades at around 4-1 against the Dollar, making it significantly more valuable than virtually any other African currency.
3. Ghanaian Cedi
Ghana has increasingly become a byword for prosperity in West Africa. Over the course of the past decade, Ghana has featured as the number one fastest-growing economy on the planet several times, owing to a development boom and a huge rise in demand for Ghanaian exports such as rare earth minerals and hydrocarbons.
In addition, Ghana is in the midst of a growing telecom and tech boom, all of which has helped cement the reputation of the country as an economic safe port, helping to boost the value of the Cedi to around 5.80 to the Dollar.
4. Moroccan Dirham
The Moroccan Dirham is the de-facto currency of the entire Western Sahara region, which has helped make it one of the most widely-held and traded currencies in Africa, thus helping to maintain its high value against the Dollar.
Morocco's economy has also experienced stratospheric levels of GDP growth in recent years, thanks to a turn towards a services-led economy that has allowed Morocco to out-compete other countries in the provision of cheap services. As such, the Dirham has stood at around 8 to 1 against the Dollar for the better part of a decade - a remarkably stable track record.
Although these are the most valuable currencies in Africa right now, things can always change at the drop of a hat. Forex markets are fickle things. If market sentiment in one economy begins to decline, its currency will quickly follow.
Subscribe to our Daily Brief newsletterShare this via:
Insights and analysis into how business and technology impact Africa. We promise to leave you smarter and asking the right questions every time after you read it. Sent out every Monday to Friday.