Weakest Currencies in the World: 6 weakest currencies in the world and the real reasons behind their low value

Weakest Currencies in the World: When we travel to another country and get our currency changed, sometimes seeing a big bundle of notes makes us feel as if we have become rich overnight. But when we go to the market and start spending, we realize that the actual buying power of those notes is very low. The real strength of any country’s currency is determined by its exchange rate. In countries where there is high inflation, unstable political markets or slow economic growth, their currencies become weak globally. Let us know about the 6 weakest currencies of the world and the main reasons behind their condition.

1. Lebanese Pound – Political and economic crisis

In the last few years, there has been a historic and very scary decline in the value of the Lebanese currency (pound).

• Reasons for weakness: The main reasons for this are the long-running serious economic crisis in the country, political instability and uncontrolled hyperinflation.

• Bearing: Due to this decline, even purchasing daily essential goods has become a big challenge for the common citizens of Lebanon. There is a huge gap between the official government rate and the open market exchange rate, due to which the economic balance has been completely disturbed.

2. Iranian Rial – hit by international sanctions

Iran’s currency ‘Iranian Rial’ has remained in the list of the world’s weakest currency for a long time and its value is continuously falling into the abyss.

• Reasons for weakness: Strict international sanctions imposed on Iran, uncontrolled inflation within the country and huge decline in foreign trade are the three biggest reasons for this.

• Bearing: Foreign tourists get wads of currency notes in exchange for their strong currency, but survival has become extremely difficult for local citizens as the real value of their earnings is continuously decreasing.

3. Vietnamese Dong – Result of government policy

The Vietnamese dong has long been counted among the lowest valued currencies globally, but the story behind it is a bit different and interesting.

• Reasons for weakness: Vietnam’s economy is not weak, but the government there has deliberately adopted a policy of keeping the value of its currency low. This has been done so that Vietnam’s exports remain cheap and competitive in the global market.

• Bearing: Travelers traveling to Vietnam with strong currency can get a lot of dong for little money. This is the reason why Vietnam is one of the most affordable and budget-friendly tourist destinations in the world today.

4. Laotian Kip – Heavy debt pressure

Despite being a very beautiful and natural country in South-East Asia, Laos is struggling with economic challenges due to its weak currency.

• Reasons for weakness: The currency of Laos ‘Kip’ is not linked to any major global foreign currency, due to which it fluctuates heavily. The increased foreign debt of the country, slow economic growth rate and extremely low exports are continuously reducing its value.

• Bearing: Here tourists have to carry heavy bundles of notes with them in their bags even for small purchases.

5. Indonesian Rupiah – Higher dependence on imports

Indonesia is a fast-growing and large economy, yet the Indonesian Rupiah is still at a very weak position in terms of global exchange rates.

• Reasons for weakness: The main reasons for this are persistent inflation in the country, excessive dependence on imports from other countries for many important things and fluctuations in the global market. Besides, the country’s huge population and not fully developed infrastructure also puts economic pressure on it.

• Bearing: It is very cheap for tourists to travel here, but due to the low value of Rupiah, big notes with lots of zeros have to be used in every small and big transaction.

6. Uzbek Som – Old economic pressure

The Central Asian country Uzbekistan has made several major and stringent economic reforms in recent years to get its economy back on track, yet the Uzbek ‘Som’ is among the least valued currencies in the world.

• Reasons for weakness: Chronic economic pressure on the country, long-standing internal inflation and the country’s excessive dependence on the export of a few selected commodities (like cotton and gold) are its biggest weaknesses. Although the situation is improving in some sectors, it will take a long time for Som to become stronger in the global market.