Cheapest Currency in the World: A Look at the Lowest Exchange Rates

Have you ever asked yourself which is the lowest currency in the world? A lowest, or one may say weakest, currency can be described as a currency that comprises a low or declining purchasing power against other currencies.

Some of the factors that cause currency depreciation include the fact that the more the central bank intervened to support its currency, the more it fell—the increase in imports and the consequent decrease in export revenue, inflation rate differences, and political instability.

Here is the list of the top 10 weakest currencies in the world in 2024. You will never guess who comes out on top.

Top 10 Cheapest Currency in the World

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Let’s read about each currency in detail!

1. Iranian Rial

The Iranian rial (IRR) has been declining since the collapse of the US-Iran nuclear deal back in 2015, when severe sanctions were also put in place. It plummeted and reached the lowest level over the past many years, having become somewhat stable in recent years, while new tension spikes in the Middle East affected the value again.

2. Vietnamese Dong

Vietnam dong, or VND, stands second on the list of the world’s weakest currencies. This is especially the case because of restrictions on foreign exports, whose activity has also decreased in terms of volume. Other factors that have caused further depreciation of the dong in the recent past are that its central bank has also been devaluing the currency to facilitate exportation.

3. Indonesian Rupiah

The Indonesian rupiah (IDR) remains one of the weakest currencies globally in 2024 for two reasons. These are high inflation and expectations that the economy might possibly slip into recession. These two lower the currency even if the country is among the largest economies in Southeast Asia as per the global GDP.

4. Sierra Leonean leone

The external value of the Sierra Leonean leone (SLL) has been subjected to a range of different things. These are high debts and high inflation rates coupled with slow economic growth—and, of course, the lasting effects of major diseases like the Ebola virus.

5. Lebanese Pound

The Lebanese pound is the lowest currency in the world. This is especially due to the high inflation rate and a downturned economy, coupled with political instabilities. The country has also been experiencing a banking crisis since the year 2019.

6. Guinean franc

The Guinean Franc (GNF) started its free fall after some conflict incidences in the 1990s. To this day, it remains one of the world’s weakest currencies owing to some factors, including military unrest and high levels of inflation. However, there has been an indication in the recent past that the rate of increase of the GNF has stabilized.

7. Uzbekistan som

Even though Uzbekistan holds significant proven oil and natural gas reserves (which is characteristic of countries with some of the strongest currencies in the world), the Uzbekistan som (UZS) has remained relatively weak in recent years. It is argued that this could be a result of high unemployment, high inflation, low economic development, and corruption challenges.

8. Laotian Kip

Lao, or Laotian kip (LAK), is one of the weakest currencies in the world as a result of the following factors: These are high inflation, a slow rate of economic growth, and a rise in foreign debts.

9. Paraguayan guarani

Paraguay’s currency guarani (PYG) has long faced problems with inflation and unemployment that have reduced its strength to one of the lowest globally. The PYG is also faced with corruption and counterfeit currency challenges.

10. Malagasy ariary

The last in our ranking but one of the lowest-value currencies in the world is the Malagasy ariary (MGA). In about 2009, its currency began to slide in the monetary standards table due to a combination of natural calamities and political unrest.

Unfortunately, the scenario has only worsened in recent years, and the high inflation prevalent today makes the MGA even weaker due to the reluctance of foreign investors to invest in Madagascar.

What Determines the Value of the Currency?

1. Inflation Rates: Mostly, high inflation rates in a country devalue the currency. When purchasing power decreases, the value of the money goes less than that of other currencies.

2. Political Stability: If the country is politically unstable, most likely the currency would be devalued. Investors enjoy stable environments, while uncertainty, especially capital flight, takes the value of the currency down.

3. Interest Rates: Higher interest rates provide a higher return on investments for the particular currency and therefore tend to appreciate it. Low interest rates may make the currency lose its purchasing power.

4. Trade Balance: A country with a large trade deficit, that is, one that is importing more than it is exporting, will usually have its currency weakened. This is because, on the supposition, to be able to buy foreign goods, one needs to sell its own currency more into the market, hence increasing supply and reducing its value.

5. Foreign Exchange Reserves: Countries that maintain large amounts of foreign exchange reserves can prop up the value of their currencies. Those countries with meager levels of foreign exchange reserves have a weakened currency.

Conclusion

Summing up, the given list of the top 10 world's lowest currencies in 2024 helps to understand how the value of the currency may vary in different countries. These low currencies are a consequence of the economic adversities of these countries or regions. Knowledge of these currencies can make us realize that global economies can be different from one another.

Frequently Asked Questions (FAQs)

1. What is the cheapest currency in the world?

The Iranian Rial is the poorest currency in the world in 2024 since its value is still very low compared to that of the US Dollar.

2. Which country has the world’s lowest currency?

Currently, the Iranian Rial is the lowest currency in the world; the second lowest is the Vietnamese Dong.

3. Why are some currencies considered the world’s worst currencies?

Currencies are rendered the poorest by factors such as inflation, instability in the economy, and poor government policies.

4. Is the world’s lowest currency always the same?

No, the world’s lowest currency can change over time due to shifts in economic conditions.

5. What are the impacts of having the world’s lowest currency?

It leads to higher inflation, lower purchasing power, and difficulties in international trade.

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Source:

wise.com

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