Amazing Kids! Magazine

Different Currencies from Around the World

By Olivia Pineda, Assistant Editor

 

Have you ever wondered why every country uses a different type of currency or, why one US dollar might equal .99 Canadian dollars? With the exception of the European Union, which is a group of European countries who all share the same currency, almost every country in the world has its own form of currency. In America, we are all familiar with the American dollar, in its trademark green color and rectangular shape; however, other countries’ currencies have different names and are often worth different amounts. For example, the currency used in Great Britain is called the British Pound; the currency used in Japan is called the Japanese Yen; and the currency used in Kenya is called the Kenyan Shilling. In America, we have important Americans on each of our bills, like Abraham Lincoln and Benjamin Franklin. However in other countries like Senegal, a western African country, there are camels or other animals as pictures on their bills.

You also might be wondering why different currencies have different exchange rates. An exchange rate is the amount of money needed to exchange a certain amount of money in another currency. For example, to buy one Euro, which is the currency of the European Union, you need to spend $1.44 US dollars. However, in India, in order to buy one US dollar, you need 45.66 Indian Rupees! Why is it that this “exchange rate” differs so widely in many countries? Simply put, a certain currency becomes “stronger” if there is more demand for this currency. For example, the Indian Rupee would be a stronger currency if you only needed to spend five Indian Rupees instead of 45.66 Indian Rupees to buy one US dollar. For countries like Great Britain and the European Union member countries, whose economies are fairly strong, there is more demand for their currency because people know that it is unlikely that these currencies will ever drop in value due to their strong economies. This strengthens the value of their currencies, making it so that you only need .6 British Pounds to buy one US dollar, and only .7 Euros to buy one US Dollar.

As long as countries in the world continue to use their own currencies, we will always have different exchange rates around the world. This explains why, for example, a loaf of bread in America might cost two to three dollars, but a loaf of bread in India might cost anywhere from 14 to 18 Rupees. If you ever travel outside of the United States, it might seem tiresome to convert your US dollars to British Pounds; but like every country has a distinct culture, every currency adds to our diversity in the world and adds a defining touch to many countries.

Leave a Reply

Complete the problem to Comment: * Time limit is exhausted. Please reload the CAPTCHA.