Top 10 Weakest Currencies in the World

A weak currency can be caused by a variety of factors, but the main one is typically a country’s economic fundamentals. Countries that rely heavily on exports might actively promote a weak currency to increase exports. Interventions from both domestic and foreign sources can also cause currencies to weaken. In this blog post, we will discuss the top 10 weakest currencies in the world!

List Of Top 10 Least Valuable Currencies 

Here are the 10 lowest valued currencies of the world:

1. Iranian Rial (IRR)

1 IRR value in INR: 0.0020 Indian Rupee

The world’s weakest currency is the Iranian Rial. Factors such as economic sanctions limiting Iran’s petroleum exports, political unrest in the country,  the lasting effects of the Iran-Iraq war, and the country’s nuclear programme. 

In 1979, following the Islamic Revolution, the rial downward spiral began and resulted in political instability and emergence of a thriving black currency market. The continued devaluation in rial in the past four decades has been contributed by high unemployment rate, hyperinflation and lack of foreign investors. 

2. Vietnamese Dong (VND)

1 VND value in INR: 0.0033 Indian Rupee

In 1954, Vietnam was divided into two countries i.e., North and South Vietnam, and both of them came up with their own currency Dong. After the Vietnam War came to an end, the Dong became Vietnam’s unified currency. Due to high inflation, currency devaluation and economic reforms, the Dong was weakening. 

However, in the 2000s, it started becoming stabilized. Still, the currency has a long way to go. The weak currency might be favorable to Vietnam since the country runs a trade surplus, providing it a competitive advantage.

3. Sierra Leonean Leone (SLL)

1 SLL value in INR: 0.00371 INR

Sierra Leone is an African nation severely impacted by poverty. The nation has a long history of corruption and various scandals. Not only this, the country also witnessed a terrible civil war along with other wars in West African countries. The recurring life threatening Ebola virus also contributes to the currency weakening.

Due to all this, the country’s economy has declined majorly and the currency has weakened extensively.

4. Lao or Laotian Kip (LAK)

1 LAK value in INR: 0.0038 INR

In 1952, three years after gaining independence from France, the Laotian kip was regarded as Laos official currency. Initially, the currency was pegged to French currency Franc. However, all good things come to an end. So, after a long period of stability, the currency started to become volatile in the 1990s as the country faced multiple economic reforms and transitioned to an economy which is market-oriented. Post-covid period, the kip has intense pressure amid the rising inflation and ongoing economic crisis.

5. Indonesian Rupiah

1 IDR value in INR: 0.0054 INR

Located in Southeast Asia, Indonesia is an economically stable country. However, despite this, the nation’s official currency Rupiah has one of the lowest exchange rates. Because of its low value, in September 2016, 7 new bank notes were issued. Regulatory authorities of the country have implemented various measures to strengthen the currency but most efforts have only led to little, insignificant changes.

Some factors which have contributed to the devaluation of Rupiah include declining foreign exchange reserves. Indonesia is a nation which is heavily reliant on the export market, and because of the decline in the cost of commodities, the Rupiah value has devalued further.

6. Uzbekistani Som

1 UZS value in INR = 0.0065 INR

Currently, the Uzbek som is the sixth weakest currency in the world. High rates of unemployment, inflation, and corruption have all contributed to the devaluation of the som, and Uzbekistan’s economy has been slow to recover from the Soviet era. The nation’s currency is susceptible to external shocks because of its weak economic diversification and reliance on commodities exports.

Initially, the exchange rate between the USD and the UZS was fixed. However, in September 2017, the Uzbek Central Bank implemented a controlled floating exchange rate mechanism, allowing the UZS to react to changes in the external market. Over time, the Uzbekistan Sum has seen periods of inflation and depreciation. The Uzbek administration has taken steps to stabilize the currency and promote economic growth. 

7. Guinean Franc

1 GNF value in INR: 0.0097 INR

Guinean Franc is one of the weakest currencies in the world. Guinean economy is rich in natural resources like gold, diamonds and bauxite. However, the country’s high inflation rate, widespread poverty and lack of diversification have led to the GNF’s devaluation. Further, the political instability and corruption have contributed to the currency’s decline. 

GNF, in 1985, underwent a new denominational structure due to economic restructuring. At this time, new notes were circulated as an attempt to restore economic stability. But due to political issues, military control, civil unrest, the exchange rate of Guinean Franc continued to swing.

8. Paraguayan Guarani

1 PYR value in INR: 0.010 INR

The Paraguayan government introduced its own currency in 1845, marking the beginning of the guarani’s long history. A number of crises and periods of hyperinflation have affected the value of the guarani throughout Paraguay’s history, such as the debt crisis in the 1980s and the Chaco War in 1932–1935.

The export of agricultural goods is the main source of income for Paraguay. Because of this reliance, its currency is susceptible to changes in the commodities markets. Demand for foreign money is rising while demand for the PYR is declining as a result of the nation’s long-standing trade deficit.

9. Cambodian Riel

1 KHR value in INR: 0.021 INR

Cambodia is a Southeast Asian country and its official currency Cambodian Riel is one of the cheapest currencies in the world. KHR was issued in 1995 with an aim to replace Indochinese Piaster and it initially had a lower rate of exchange. As many Cambodians preferred to use foreign currencies, the Riel was originally not a popular choice. Even now, for many payments, Cambodians use USD. This is the reason why the KHR continues to face currency devaluation.

10. Ugandan Shilling

1 UGX value in INR: 0.023 INR

Under Ugandan President Idi Amin Dada Oumee’s governance from 1971 to 1979, Uganda faced several setbacks. The country’s economy was negatively impacted by the president’s policies, including immigration policies. 

Till date, the country’s development is being affected by such policies. However, in recent years, UGX has witnessed an improvement in value as it hasn’t faced more than 5% devaluation. In comparison to other currencies in the world, UGX is a comparatively stable currency.

Must Read: Why Does Indian Rupee Depreciate?

Conclusion

In this blog post, we discussed the top 10 weakest and least valuable currencies in the world. Corruption, political instability, military rule, black currency market, reliance on import, etc. are some factors which weaken currencies.

Disclaimer: The rankings for the weakest currencies in the world were done taking into account Forbes’ data. These rankings might change in future as the countries develop and become economically and politically stable.