Does a strong currency mean strong economy? There is no perfect answer, but I would reply with “yes and no”.

Some countries with strong currencies have a strong economy, but it is not always the case. Let us look at some data about exchange rates around the world.

Since more and more countries use floating exchange rates, most figures hereafter will change at any time.

• One USD is worth 0.72 British pounds, however is it good evidence that the British economy is bigger than the US one? Probably not. Another example is, one USD is currently worth 0.30 Kuwaiti Dinar. Most economists would agree that Kuwaiti economy is not stronger than the US despite the high GDP per capita in Kuwait.

Let us keep going.

• One South African Rand has the same value as one Lesotho Loti (Maloti in plural) and the same value as one Eswatini (former Swaziland) Lilangeni (Emalangeni in plural), but who would think that those two small countries have the same economic strength as South Africa? They may become the Switzerland of Africa someday, but not now.

While I was working in South Africa for twenty months and in Botswana for four months, I had the opportunity to use the Rand and the Pula – which is the currency in Botswana. The Pula is a little stronger than the Rand: one rand is worth around 0.73 Pula or 73 Thebe – one Pula is divided into 100 Thebe. Most of us probably know that South Africa is among the top 3 economies of Africa and the only member of G20 in our continent.

Let me continue with some unbelievable facts about exchange rates in Asia and South America.

• One USD is the equivalent of 42,105 Iranian riyals. Yes, it is more than forty-two thousand Riyals, but we complain when we exchangeone USD for about 3,800 Ariary. Is our economy bigger than the Iranian's?
• Here is another one – 1 USD is worth around 23,100 Vietnamese Dong. Remember that the Vietnamese economy is much stronger than ours – a GDP of 245 billion USD in 2018, however their money seems to be much weaker.
• Last but not least, one USD is worth 1,872,262 Venezuelan Bolivar, and this is so despite Venezuela's proven crude oil reserves of 302 billion barrels, according to data from OPEC website.

If you are interested in knowing the top 10 weakest currencies in the world, just do a quick research on Google or Bing and you will be surprised to find out that our Ariary is not as weak as most people think.

• Another surprise! We can buy one Japanese yen with just 36 ariary, in other words one Japanese coin has the same value as our coin or coins. But here is the issue – the cheapest product in Japan costs about 100 yen. A couple of years ago, one of my friends gave me a few Japanese coins but I cannot even buy the cheapest Japanese candy pack with them.
• Some people believe that gold reserves help keep a currency strong, however Uzbekistan who is in the top 15 countries having largest gold reserves in the world (332.5 metric tons), is among the 10 countries with weakest currencies. One USD is now worth about 10,500 Uzbek Sum. Additionally, Germany, France and Italy are in the top 5 countries with largest gold reserves by data from Statista, however one Euro is worth around 0.36 Kuwaiti Dinar.

Because of all these strange facts about exchange rates, 1 Ariary that seems worthless in our country, has the same value as 2.49 Laotian Kip, 2.79 Uzbek Sum, 3.77 Indonesian Rupiah, 6.05 Vietnamese Dong, 11.17 Iranian Riyals and 481.7 Venezuelan Bolivar. Our currency is stronger than the ones in those countries even if their economies are stronger than ours.

I chose not to talk about currency manipulation in this article because I believe there are not yet strict currency rules for all members of the World Trade Organization.  

Now, you can see why the answer to my first question is “yes and no”.