Kuwaiti Dinar (KWD)

What Is The Kuwaiti Dinar (KWD)?

The Kuwaiti dinar (KWD) is the official currency of the country of Kuwait, which on the north and west borders Iraq, the Persian Gulf on the east, and the Kingdom of Saudi Arabia on the south.

Unlike other currencies, such as the United States dollar (USD), recognized as the internationalized currency and used in many countries worldwide, the Kuwaiti dinar is only used in Kuwait.

The Kuwaiti dinar is the most valuable currency in the world, with 1 KWD = 3.23 USD (October 2023), mainly due to the country's economic stability and abundant oil reserves.

Kuwait is a major oil supplier in global markets; therefore, a significant proportion of its government's revenue comes from the oil supply. The high oil demand creates a high demand for Kuwait's currency. In addition, the Kuwaiti dinar is also quite stable and a great diversifier for currency portfolios.

Brief History of Kuwait and the Kuwaiti Dinar

Kuwait is not the only country that uses the "dinar" as currency; it is used in other countries in the Middle East, like Jordan, Algeria, and Bahrain, among a few others.  

Between 1959 and 1966, the British protectorates of the Arabian Peninsula around the Persian Gulf recognized the Gulf rupee as the official currency. These protectorates comprise modern-day Bahrain, Oman, Qatar, the United Arab Emirates, and Kuwait.

After the fall of the Ottoman Empire, Kuwait became a British protectorate. The Indian rupee was introduced as the currency, followed by the Gulf rupee, which was pegged to the Indian rupee and later to the British pound.

In 1961, Kuwait gained independence from Great Britain, so the Kuwaiti Currency Board created the Kuwaiti dinar to become the new unit of money for the country. The dinar and rupee were used simultaneously until India devalued the Gulf rupee, which diminished its use in the Persian Gulf.

Iraq invaded and occupied Kuwait for roughly seven months in 1990, during which the occupation forces stole several Kuwaiti dinar banknotes. They announced the Iraqi dinar as the new official currency at that event.

When Kuwait regained its independence from Iraq in 1961, the Kuwaiti dinar also returned.

However, a limitation of pegging currency is that the unit is only as strong as the one it is pegged to. Between the late 1970s and early 1980s, the exchange rate of the British pound dropped significantly.

This pegged system continued until 2003 when Kuwait shifted its currency peg to the U.S. dollar. At that time, roughly three dinars were equivalent to one U.S. dollar.

Kuwaiti Banknotes and Coins

Let us read more about the Kuwaiti banknotes and coins below:

Banknotes:

• Kuwait has had six series of banknotes issued by the Kuwaiti Currency Board since 1961, symbolizing the nation's independence and cultural heritage.
• Additionally, two commemorative sets were released in 1993 and 2001, marking significant anniversaries of Kuwait's freedom from Iraq.
• The Central Bank of Kuwait exclusively issues Kuwaiti currency, divided into one thousand Fils, with values including a quarter dinar, half dinar, one dinar, five dinars, ten dinars, and twenty dinars.
• These banknotes are meticulously designed, incorporating Kuwait's achievements, national spirit, and cultural symbols, including landmarks like the Palace of Justice, ruling figures, a dhow sailing ship, and a falcon.

Coins:

• Kuwaiti coins were introduced in 1961 and have retained their design till today. The "head" side features a boom dhow and the minting year in Arabic, adapted for both Islamic and common calendars.
• The "tails" side displays the coin's value in Arabic within a circle, accompanied by "KUWAIT" written in Arabic and English.
• Kuwaiti coins are available in denominations of 1, 5, 10, 20, 50, and 100 fils, with a unique 0.02 dinars coin, setting it apart from other Middle Eastern currencies.
• Additionally, the Central Bank of Kuwait has issued commemorative coins, including silver and gold sets, marking significant events such as Kuwait's liberation, national day, currency issuance anniversaries, and milestones in the economy and politics.

Issuance of the KWD (Kuwaiti Dinar)

the Sixth kuwaiti dinar Issue

There is a subtle image of the Kuwaiti flag in the background of every banknote to represent national identity. In addition, the images on each side of a banknote are varied to illustrate Kuwait's economic, industrial, and cultural monuments and/or the aspects of marine or desert life.

As per the CBK's booklet on the design, elegance, and security of the sixth issue (published in English and Arabic), the descriptions of the designs are as follows:

• The 20 dinar note features Seif Palace on the front. The back shows a dhow known as Al Boom, the most popular traditional dhow, and a design related to pearl diving. Before oil, pearl diving helped Kuwaitis earn an income.
• The 10 dinar note's front side features the National Assembly Building, while the back has a falcon and camel to represent their desert life.
• The 5 dinar note has an image of the new Central Bank building as a symbol of economic stability. Meanwhile, on the back is a depiction of an oil refinery, representing their prosperity.
• The 1 dinar note highlights the Grand Mosque on the front and the island of Failaka on the back.
• The half dinar note displays the Kuwait Towers on the front, one of the most familiar buildings. The endangered hawksbill sea turtle and silver pomfret are on the back, symbolizing marine life. The silver pomfret is the most popular fish. 
• The quarter dinar note exhibits the Liberation Tower on the front side, signifying independence. A traditional wooden door, a plaster carving, and the first-ever local coin make up the design of the backside.

This issue contains the most advanced security features in printing history. These features rely on touching, tilting, and lifting the notes. For instance, some threads change color when the note is tilted.

Facing it to the light reveals a shift in color and design, with an image, the note's value, and a falcon watermark.

The Central Bank prints note values in a larger font and with unique raised ink on the edge of the surface to aid the visually impaired in society. This sixth issue is the one that is currently utilized today.

Researched and Authored by Laila Al-Eisawi | LinkedIn

Edited by Abdul Aziz Rasheedy | LinkedIn

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