Last year, one of our most popular blogs took a look at the world’s weakest currencies.
You’ll note that nothing much changed from the 2019 version. This is to be expected with the ongoing global pandemic – as there was no substantial opportunity for weaker currencies to grow. Uncertainty causes investors to either sit on their money or stick with the reliable, stronger currencies.
Here we take a look the world’s weakest currencies (as of August 27th, 2020), valued against the world’s most traded currency, the US dollar.
*Exchange rates sourced from Google Finance.
Interested in the flip side? Check out the Top 10 Strongest Currencies in the World (2020).
#1 – Iranian Rial [1 USD = 42,105 IRR]
Once again, the world’s weakest currency was the Iranian rial. Iran has experienced a significant economic downturn due to numerous sanctions. Without the ability to export petroleum to the global market (worth about 70% of annual income), Iran now faces a huge deficit in its national budget.
#2 – Vietnamese Dong [1 USD = 23,175 VND]
Vietnam is still on the hard path from a centralized economy to a market one, and this has had an obvious impact on its national currency. The country has a relatively small economy and since investors tend to be wary of investing in relatively unknown currencies, the dong doesn’t play a significant role in the global market.
#3 – Indonesian Rupiah [1 USD = 14,697.50 IDR]
Indonesia is an economically stable country, however, its currency has a very low exchange rate. The Indonesian government has taken measures to strengthen its national currency by raising interest rates and buying sovereign bonds, but the rupiah has continued to depreciate.
#4 – Uzbekistani Som [1 USD = 10,291.68 UZS]
Originally pinned to the US dollar at its introduction in 1994, the som flourished in the illegal black market. By 2017 it was left with almost no value against the US dollar. That year, the Uzbeki government devalued its currency by almost half in an attempt to end decades of market isolation and tempt investors towards the commodity-rich country. While the som remains relatively weak, it has stabilized.
#5 – Sierra Leonean Leone [1 USD = 9,762.50 SLL]
Sierra Leone has a rich supply of natural resources including diamonds, iron ore, gold and chromite … yet it is one of the world’s 10 most impoverished and least developed countries.
This is because Sierra Leone’s economy continues to struggle under the weight of conflict and recurring Ebola epidemics. GDP plunged during the 2015 Ebola outbreak, and despite some growth, it remains in the repressed category today.
#6 – Guinean Franc [1 USD = 9,666.80 GNF]
Similar to Sierra Leone, neighbouring Guinea is rich in natural resources, including bauxite, iron ore and diamond and gold deposits. However, Guinea has also faced stalled economic growth because of political instability and Ebola outbreaks.
#7 – Laotian Kip [1 USD = 9,109.49 LAK]
The world’s seventh weakest currency in 2020 is an outlier on this list. This is because Laos is the only country on this list whose currency was not forced to devalue – it was originally issued with a very low exchange rate against USD back in 1952.
#8 – Paraguayan Guarani [1 USD = 6,989.35 PYG]
After a deep recession in the late 1990s and early 2000s, Paraguay suffered climbing inflation rate, economic downturn, corruption, low education quality and high unemployment. Although the country exports cotton and soybeans, this is not enough to cover the cost of its imports.
Last year, paraguay did go from being the second poorest South American country (by GDP) to the fourth poorest in the space of just 3 years – but this growth has been strongly hampered by COVID-19.
#9 – Cambodian Riel [1 USD = 4,101.44 KHR]
When the Cambodian riel was first introduced in 1995, it wasn’t very popular – that hasn’t changed much in the years since. Although the riel is the official currency, the US dollar had been in use in Cambodia since United Nations peacekeeping forces arrived in the early 90s. Many Cambodians still prefer it – USD is used for a massive 90% of transactions here, causing the less popular riel to have a correspondingly lower value.
#10 – Ugandan Shilling [1 USD = 3,686.64 UGX]
The Ugandan shilling first appeared in 1966, replacing the East African shilling (also used in Kenya, Tanganyika and Zanzibar) as Uganda’s official currency. Despite its relatively low value against the US dollar over the past few years, the Ugandan shilling has remained quite stable.
Some currencies, including the Venezuelan bolívar and the São Tomé and Príncipe dobra,have been excluded from our weakest currency list due to recent denomination.