Jump to content


Photo
- - - - -

Kuwaiti Dinar vs. Saudi Riyal???


  • This topic is locked This topic is locked
13 replies to this topic

#1 mythunter

mythunter

    Senior Member

  • Members
  • 634 posts
  • LocationArizona

Posted 12 May 2010 - 10:00 AM

I have a question. Why is there such a huge discrepancy between the value of the Kuwaiti Dinar and the Saudi Riyal compared with the US Dollar? I would think that Kuwait and Suadi Arabia would both have a strong and HIGH value compared to the dollar. Both countries are oil rich and are very wealthy.

Todays exchange rate is:
Kuwaiti Dinar = 1.00 vs. US Dollar = 3.45
Saudi Riyal = 1.00 vs. US Dollar = 0.267

What gives? :blink:
  • 0

#2 jimanita

jimanita

    Registered and Approved!

  • Members
  • 359 posts
  • LocationAustin Texas

Posted 12 May 2010 - 10:03 AM

I have a question. Why is there such a huge discrepancy between the value of the Kuwaiti Dinar and the Saudi Riyal compared with the US Dollar? I would think that Kuwait and Suadi Arabia would both have a strong and HIGH value compared to the dollar. Both countries are oil rich and are very wealthy.

Todays exchange rate is:
Kuwaiti Dinar = 1.00 vs. US Dollar = 3.45
Saudi Riyal = 1.00 vs. US Dollar = 0.267

What gives? :blink:



Hmmmm good question :) would not have ever guessed that
  • 0
"Strength & Honor"

#3 Serenity

Serenity

    Member

  • Members
  • 178 posts

Posted 12 May 2010 - 10:05 AM

I have a question. Why is there such a huge discrepancy between the value of the Kuwaiti Dinar and the Saudi Riyal compared with the US Dollar? I would think that Kuwait and Suadi Arabia would both have a strong and HIGH value compared to the dollar. Both countries are oil rich and are very wealthy.

Todays exchange rate is:
Kuwaiti Dinar = 1.00 vs. US Dollar = 3.45
Saudi Riyal = 1.00 vs. US Dollar = 0.267

What gives? :blink:

Kuwait is a very tiny country...Can afford to contract its currency supply and have a high value....Kuwait's currency is the most valuable currency in the world.
  • 0

#4 nventr

nventr

    Member

  • Members
  • PipPipPip
  • 70 posts

Posted 12 May 2010 - 12:24 PM

I have a question. Why is there such a huge discrepancy between the value of the Kuwaiti Dinar and the Saudi Riyal compared with the US Dollar? I would think that Kuwait and Suadi Arabia would both have a strong and HIGH value compared to the dollar. Both countries are oil rich and are very wealthy.

Todays exchange rate is:
Kuwaiti Dinar = 1.00 vs. US Dollar = 3.45
Saudi Riyal = 1.00 vs. US Dollar = 0.267

What gives? :blink:

Back in the day when IIF was in the fore-front of Dinar forums this was extensively debated there. It was generally concluded that the Saudi Riyal was on a base that compared it to the American dime much as the Japanese Yen is on a base that compares it to the American penny.
If that were the case then the relative values of Kuwaiti and Saudi currencies are 'in the same ballpark'.
(This should generate some good discussion)
  • 0

#5 Doc31

Doc31

    Dinarified Senior Member

  • Members
  • 4,656 posts
  • LocationS W Florida


Posted 12 May 2010 - 01:13 PM

Back in the day when IIF was in the fore-front of Dinar forums this was extensively debated there. It was generally concluded that the Saudi Riyal was on a base that compared it to the American dime much as the Japanese Yen is on a base that compares it to the American penny.
If that were the case then the relative values of Kuwaiti and Saudi currencies are 'in the same ballpark'.
(This should generate some good discussion)


Nice, thanks for the info .. makes good sense
  • 0

#6 Jigga

Jigga

    Member

  • Members
  • PipPipPip
  • 95 posts

Posted 12 May 2010 - 02:04 PM

This is an example of why the Iraqi dinar might not EVER be back up to pre war levels.....that rate was artificially set by Saddam.....and if you look at Saudi Arabia they produce WAY MORE oil then Iraq but their currency isent worth more then the American dollar.....Just because a country has oil doesnt necessarily mean its going to have very valuable currency.....And again all the talk about what Iraq can afford to RV their currency at because of the oil and other things doesnt mean squat either...there are so many other things involved in a countries currency rate....hell im sure Saudi Arabia can afford a higher currency value then Kuwait but is it?? NOPE.....we need to be thinking more realistically here....i think we would be the luckiest people in the universe if we see anything even close to 86 cents......do i hope im wrong?? HELL YEA!!! hahaha but im just tryin to keep my feet on the ground and everyone elses as to not dash any hopes when we finally see this RV....just be humble people and dont be greedy.....good things come to those who wait....
  • 3

#7 powerpager

powerpager

    Platinum VIP

  • Members
  • 2,614 posts
  • LocationTEXAS


Posted 13 May 2010 - 06:43 AM

Watch Olan Downs whipping Jeff :lol: :lol: :lol:
  • 0

#8 ReachingHigher

ReachingHigher

    Senior Member

  • Members
  • 262 posts
  • LocationNH

Posted 13 May 2010 - 07:36 AM

Ok - I am not clever enough to know how to go back in the archives here at DV to find it, but sometime in the past month or two someone very clearly described why the Saudi riyal
is so low compared to the Kuwaiti dinar. Some of the mods or older members might be able to dig it out to post here.

In a nutshell the answer (paraphrase) is Saudi Arabia has their currency valued this "low" by design and on purpose. (now here is where I may muck this up)
The value of (roughly) 1 riyal = 0.27 cents US (or it takes 3.75 riyals will buy one USD) - my memory of this previous post (which was very clear compared to mine)
is that Saudi Arabia gets the best of both worlds by keeping their rate low against the dollar....but I can't remember why.

The part I wonder about is if Kuwait and SA both have oil for sale but I can buy my oil "cheaper" in Saudi Arabia, then why would I go and buy "expensive" Kuwaiti oil?? Perhaps THIS is part
of the design - SA can sell their oil cheaper so more people come to their "gas station"??

If you look at all of the surrounding Middle Eastern countries: Bahrain, Kuwait, Qatar, Saudi Arabia, UAE, Isreal - except for Bahrain and Kuwait - all other countries are at almost exactly the same rate.
Seems to me to be at least logical/plausible the Iraq would come out at least at the same rate (give or take) as SA, UEA, Qatar and Israel. (1 of theirs only buys 0.27 cents of ours)
This in simple terms would mean if you had 1,000,000 dinars then you would get 270,000 USD (not including bank/exchange fees, taxes, etc).
Even if it came in as low as Afghanistan's afghani (it takes 46 afghani to buy 1 USD) then if you had 1,000,000 afghani you would still get $21,584 in exchange.

Bottom line to the question - Saudi riyal is kept at the lower rate buy design....not because it is less valuable.
Just like China - they have a lower valued currency and this benefits them.

Peace.
Please feel free to correct, etc.
  • 1

#9 Robinsnest

Robinsnest

    Member

  • Members
  • 111 posts

Posted 13 May 2010 - 07:50 AM

You make a good point. This is easy. I will take .267 right now and be happy. Anything more than that would be an even greater gift. If your expecting over a dollar, I believe you might not be a very happy investor if and when the dinar ever RV's?
  • 0

#10 mythunter

mythunter

    Senior Member

  • Members
  • 634 posts
  • LocationArizona

Posted 13 May 2010 - 09:04 AM

then why would I go and buy "expensive" Kuwaiti oil??

Read more: http://dinarvets.com.../#ixzz0np1n4Hu8


This doesn't really make sense to me. It seems everyone would just purchase their oil from Saudi Arabia and not from Kuwiat. Mmmmmmmm.
  • 0

#11 Robinsnest

Robinsnest

    Member

  • Members
  • 111 posts

Posted 13 May 2010 - 09:16 AM

then why would I go and buy "expensive" Kuwaiti oil??

Read more: http://dinarvets.com.../#ixzz0np1n4Hu8


This doesn't really make sense to me. It seems everyone would just purchase their oil from Saudi Arabia and not from Kuwiat. Mmmmmmmm.


I believe OPEC sets the price per barrell in US dollars. Thats what you sell it at on the open market. So it doesnt matter what your countries exchange rate is to the dollar. This does not apply to other exports, This is why China is being pressured to increase the Yuan to the dollar. They are killing everyone with low exchange rates on exports. Other countries cant complete.
  • 0

#12 mythunter

mythunter

    Senior Member

  • Members
  • 634 posts
  • LocationArizona

Posted 14 May 2010 - 02:29 PM

I believe OPEC sets the price per barrell in US dollars. Thats what you sell it at on the open market. So it doesnt matter what your countries exchange rate is to the dollar. This does not apply to other exports, This is why China is being pressured to increase the Yuan to the dollar. They are killing everyone with low exchange rates on exports. Other countries cant complete.


Read more: http://dinarvets.com.../#ixzz0nwBzUHqC

It seems then that Saudi Arabia is really raking it in with such a low exchange rate compared with Kuwait. Would Iraq want to follow this same strategy? Does any one have an opinion?
  • 0

#13 MacGillies

MacGillies

    Member

  • Members
  • PipPip
  • 14 posts
  • LocationColorado Rockies

Posted 14 May 2010 - 04:03 PM

I believe OPEC sets the price per barrell in US dollars. Thats what you sell it at on the open market. So it doesnt matter what your countries exchange rate is to the dollar. This does not apply to other exports, This is why China is being pressured to increase the Yuan to the dollar. They are killing everyone with low exchange rates on exports. Other countries cant complete.


Read more: http://dinarvets.com.../#ixzz0nwBzUHqC

It seems then that Saudi Arabia is really raking it in with such a low exchange rate compared with Kuwait. Would Iraq want to follow this same strategy? Does any one have an opinion?


My guess is that they would, at least initially, want a higher rate; SA doesn't have th debt load that Iraq does. Iraq could be facing a Greece style crisis if they don't reduce their debt, and a lower exchange rate won't help them. There will still be a market for as much oil as they can produce.
  • 0

#14 theDude

theDude

    Junior Member

  • Members
  • PipPip
  • 26 posts

Posted 15 May 2010 - 05:05 PM

i don't know if this is correct or not, but once i asked this question in chat, and a guy that seemed to know what he was talking about, explained it something like this.
SA, while a single kingdom is divided into many smaller kingdoms ruled by very rich and powerful sheik families. some of which are as powerful as the rulers of SA. most of the oil money goes to these sheiks, not to the goverment.. remember these sheiks are very rich and powerful. some could challenge the throne if they so desire, so the sheiks in rule tread lightly when taxing them. so much of the money stays in these shieks accounts abroad and not going into the local SA economy. and that's why SA, quator and these other sheik controled countries are a lot lower compared to the kiwate which is a country with state owned and controled oil.
  • 0




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users

  • Privacy Policy