Weakest Currencies in the World
In the wake of the COVID-19 pandemic and its significant impact on the global economy, opportunities for growth in the weakest currencies have diminished. This article examines the weakest currencies worldwide by comparing their exchange rates against the US dollar, which is the most widely traded currency globally.
Iranian Rial
The Iranian rial has become the weakest currency globally. Currently, Iran is facing a severe national budget deficit due to its inability to export oil, which accounts for approximately 70% of its annual income. The current exchange rate for the Iranian rial against the dollar is [1 USD = 42,205 IRR].
Vietnamese Dong
The Vietnamese dong is relatively lesser-known, making investors cautious about investing in it. Vietnam is still transitioning from a centrally planned economy to a market economy, which has distinctly impacted its national currency. Moreover, as a relatively small economy, the dong does not play a significant role in the global market. Its exchange rate against the US dollar is [1 USD = 22,850 VND].
Indonesian Rupiah
Indonesia is considered economically stable. However, despite government efforts to strengthen the nation’s currency through increased interest rates and purchasing sovereign bonds, the rupiah has continued to depreciate, maintaining a significantly low exchange rate against the dollar of [1 USD = 14,189.35 IDR].
Uzbekistani Som
The som was introduced on July 1, 1994, with an initial exchange rate of 1 som per coupon. By 2017, it had lost all value against the US dollar due to its boom in the illegal black market. This prompted the Uzbek government to devalue its currency by nearly half in an attempt to attract investors to the resource-rich nation. Despite some stabilization, the som remains weak, with an exchange rate of [1 USD = 10,800.0 UZS].
Sierra Leonean Leone
Sierra Leone is rich in natural resources such as diamonds, iron ore, and gold, yet it ranks among the ten poorest and least developed countries globally. The nation’s economy has suffered due to prolonged conflict and recurring Ebola outbreaks, which caused a drop in GDP during the 2015 Ebola crisis. The current exchange rate against the dollar is [1 USD = 11,335.0 SLL].
Guinean Franc
Neighbors to Sierra Leone, Guinea is abundant in natural resources such as bauxite, iron ore, and diamond deposits. However, political instability and high inflation leading to increased poverty have significantly depreciated the value of the Guinean franc. Its exchange rate against the dollar stands at [1 USD = 9,350.0 GNF].
Laotian Kip
Ranking as the seventh weakest currency in the world in 2020, the Laotian kip was introduced at a very low value against the US dollar in 1952. Interestingly, while many currencies have faced devaluation, the kip has strengthened over time, boasting an exchange rate of [1 USD = 1,116.0 LAK].
Paraguayan Guarani
Paraguay has grappled with high inflation, economic stagnation, and corruption following a deep recession in the late 1990s and early 2000s. The situation worsened in 2020 due to the COVID-19 pandemic, which saw the nation transition from the second poorest to the fourth poorest in South America within three years. The current rate for the guarani against the dollar is [1 USD = 6,816.07 PYG].
Cambodian Riel
The Cambodian riel was first issued in 1995 but did not gain significant traction. Although it is the official currency, the US dollar has been in use in Cambodia since the deployment of UN peacekeeping forces in the early 1990s. This preference for the dollar has led to a depreciation of the riel, with its exchange rate against the dollar being [1 USD = 4,075.0 KHR].
Ugandan Shilling
First issued in 1966 to replace the East African shilling, the Ugandan shilling has remained stable over the years despite its low exchange value against the dollar, which currently stands at [1 USD = 3,539.43 UGX].