Welcome to the second part of 10 Global Currencies and their Histories, where we provide the details and background behind some of the world’s most interesting and famous currencies. Part two features some cool facts from countries around the world, from the Middle East to North America – let’s get started!
Middle East – Jordan
Jordan’s history of currency usage is closely tied to the Palestinian and Israeli conflict. Prior to World War II, the Palestinian Pound was the popular currency used in Jordan, but in 1949, it was replaced with the Jordanian Dinar whose value was pegged to that of the British Pound. Like other middle eastern nations, Jordan later switched to pegging with the US Dollar, making their currency valuation linked to the price of oil. When Israel took control of Palestine’s West Bank in 1967, the Jordanian Dinar remained in circulation there along with Israeli currency, and the Dinar was even used as a fall-back currency when Israel experienced hyperinflation throughout the 1970s.
Jordan issues banknotes in denominations of 1, 5, 10, 20 and 50 dinars, and the Jordanian Dinar remains pegged to the US Dollar today with a valuation of 0.709 Dinar = $1 USD.
Europe – Scotland
Scotland’s history of currency is hundreds of years old. The Bank of Scotland was the first bank in Europe to start issuing paper money with its first banknotes becoming available in 1696, just one year after the bank was initially founded.
Scotland had a robust and entirely deregulated banking sector for most of its history. With no standard monetary system in place, over 80 different banks placed promissory notes in circulation over the last 300 years. Banknotes were originally printed on one side only, and the first use of colour didn’t happen until 1777, with popular usage of coloured notes starting about a century later. Today, only three banks in Scotland may issue bank notes: The Bank of Scotland, Royal Bank of Scotland, and Clydesdale Bank. Scottish banks operate on the GBP as part of the United Kingdom, but may issue specially printed Scottish Pounds – they are accepted everywhere and worth the same as British Pounds.
Africa – Malawi
Malawi is considered one of the least developed nations of the world, relying heavily on international aid in the form of economic support from the World Bank, International Monetary Fund and neighbouring nations, as well as international benefactors. The Kwacha is the official currency of Malawi and was adopted there in 1971 based on the Zambian Kwacha which had been introduced in 1968. The Kwacha replaced the Malawian pound and was exchanged at a rate of two Kwachas to one pound. Trade deficits are presently driving the devaluation of the Malawian Kwacha at an alarming rate – in 2010, one British pound cost 227.681 Kwacha, and by 2011, it would cost 257.7172 Kwacha for the same. By October 2016, Malawi residents were being asked to fork over nearly 900 Kwacha for 1 GBP. Rapid inflation has prompted the Reserve Bank of Malawi to print 1000 and 2000 Kwacha notes to try and keep up with currency devaluation.
Easy & Southeast Asia – Mongolia
The Mongolian Tugrik replaced a slew of unofficial currencies and became the only legal and official currency of Mongolia on April 1st, 1928. The valuation was initially given as 1 Tugrik = 1 Soviet Ruble and was backed by the silver standard. Mongolia relies on its neighbouring countries for imports, and as a result, its economy is highly sensitive to economic and political changes nearby.
During socialism, the tugrik maintained its value quite well, but when the Soviet Union collapsed in 1990, a period of rapid inflation caused the Mongolian bank to print greater denominations of currency, even up to 20,000 tugriks on a single bank note. Since then, however, Mongolia has built a strong base of exports based on its thriving agricultural and mining sectors. Its currency has steadily appreciated in value and it plans to join Asian regional economic and trade organizations following its successful induction into the World Trade Organization in 1997.
North America – Mexico
The Mexican peso is one of the oldest currencies in the western hemisphere. Its original design was based on the Spanish silver dollar and it was officially accepted in both Canada and the United States until the mid-1850s. The Mexican peso was a stable and safe currency during Spain’s time as a global colonial power, and even the American Dollar was designed and structured based on the Mexican peso.
Mexico experienced an oil crisis in the 1970s which led to an influx of foreign loans which devalued the peso considerably. Mexico’s economy continued to spiral until the nation catastrophically defaulted on its national debt and foreign investors started to leave Mexican shores in search of greener pastures. In the early 1990s, Mexico revalued the peso to combat inflation and printed new currency notes ranging from 10 to 1000 pesos in value. Presently, the peso remains stable relative to the US Dollar, despite Europe’s poor economic situation threatening its export revenue.
Thanks for reading all the way to the end! This concludes our two-part series on 10 Global Currencies and their Histories. We hope you’ve learned a little bit of background knowledge that will enhance and elevate your enjoyment of collecting your favourite banknotes!