Top 10 The Weakest Currencies In The World in 2023(Updated December)

As we reset into another global inflation crisis driven by high oil prices and the Russia-Ukraine War, the currencies on the receiving end of the catastrophe might be far away from the global lens. Their currency devalues as inflation ramps, making their markets shaky and unstable.

The world’s weakest currencies belong to the world’s third-world countries, where perhaps the economic crisis has hit the hardest. Let’s get into it.

1. Iranian Rial 

The Iranian Rial ranks as the second weakest currency in the world.

Its economic downfall started as far back as 1979 in the wake of the Islamic Revolution, which led to many businesses leaving the country due to uncertainty.

Since then, Iran has faced a further downfall in the Iran-Iraq war and nuclear sanctions. The sanctions were lifted briefly in 2016 but reinstated more harshly in 2018 and then again in 2022. 

Iranian Rial Currency Code = IRR 

2. Vietnamese Dong 

The Vietnamese Dong ranks as the third weakest currency in the world.

Still recovering from wars and shifting from a centralized to a market economy has taken its toll on the country and its operations. Vietnam is currently amongst the poorest countries in the world.

However, leading economic experts reassure us that Vietnam is on the right path and will catch up to other countries sooner rather than later. 

Vietnamese Dong Currency Code = VND

3. Laotian Kip Currency

The Laotian Kip, belonging to Laos in Southeast Asia, is rare. This is because it is the only currency on our list that has not been devalued.

At its independence, the Laotian Kip was already issued at meager rates to the people back in 1953.

The Laotian Kip has strengthened and grown against global currencies like the USD and will probably keep doing so shortly. 

Laotian Kip Currency Code = LAK

4. Sierra Leonean Leone Currency

Sierra Leone, located in Africa, is one of the poorest countries and has one of the world’s weakest currencies.

Civil uproars, a recent war, and recurring combats with deadly viruses like Ebola keep the country from focusing on economic prosperity, resulting in one of the weakest economies.

That, coupled with the COVID-19 pandemic, has made matters even worse for the country as its economy devalued even more in the last two years than it had previously. 

Sierra Leonean Leone Currency Code = SLL

5. Indonesian Rupiah 

Indonesia is one of the relatively well-off countries in Southeast Asia. Their economy is stable, and the country is well off on the developing side. However, their currency rates are meager.

The regulatory bodies have been trying to fix this by issuing new banknotes in denominations of 1 thousand to 100 thousand to replace the older banknotes and other changes to no avail.

The Indonesian Rupiah remains one of the weakest currencies in the world and hopes to advance soon. 

Indonesian Rupiah Currency Code = IDR

6. Uzbekistani Som Currency

Central-Asian country Uzbekistan ranks fifth on the list of the weakest currencies in the world. Part of the third world, Uzbekistan, has not been very well off.

In 2018, however, many regulatory measures were taken to elevate the Uzbekistani Som in the global economy.

While they have been mildly successful in helping the economy grow, Uzbekistan still has a long way to go to compete on an equal footing in the global market. 

Uzbekistani Som Currency Code = UZS

7. Guinean Franc Currency

Africa is chock-full of immensely valuable minerals, especially in Guinea. However, the country remains one of the world’s weakest currencies.

The country remains among the world’s poorest, with high poverty rates, gang issues, and inflation. Its economy is one of the most inflated worldwide.

However, it has improved in the last few months, with the currency growing by about a few hundred Francs. 

Guinean Franc Currency Code = GNF

8. Paraguayan Guarani Currency

Paraguay is the second poorest South American country and the ninth weakest currency globally.

Due to economic failure, poverty rates, high corruption, and a small service sector, Paraguay has not been able to advance economically in recent years.

It is a frequent exporter of soybeans and cotton. However, this has not been enough to combat the country’s growing poverty and economic disruption. 

Paraguayan Guarani Currency Code = PYG

9. Cambodian Riel

Cambodia is a monarch state in Southeast Asia and the tenth on our list of the weakest currencies in the world. The Cambodian Riel began its life in 1995 to replace the Indochinese Piaster.

It was issued at very low rates and was not popular among the locals, making it unable to progress in the global market.

Even now, the Cambodian Riel remains one of the more unpopular currencies in the area.

The locals prefer to make payments using U.S. dollars and other, stronger currencies, leading the currency to devalue even more. 

Cambodian Riel Currency Code = KHR

10. Ugandan Shilling

Despite the devastating effects of COVID-19 on economies, some currencies remained as weakest as they were in 2022. Ugandan Shilling(UGX) is one of them. 

The currency Uganda uses is known as the Shilling. Its banknotes have the following face values:

• 1000 shillings
• 2000 shillings
• 5000 shillings
• 10000 shillings
• 20000 shillings
• 50000 shillings

Ugandan Shilling Currency Code = UGX

The value of UGX over time has been stable. It has even improved in the past few years.

However, regardless of this currency’s stability, 1 U.S. Dollar still equals 3,641.18 UGX. Therefore proving how relatively weak UGX is to other currencies. 

Conclusion

Investing in a weaker currency may be pretty rewarding, but it is an opportunity laden with risk. Before you decide to invest in a currency weaker than yours, you must thoroughly research why it is so—understanding the reasons behind its weakness and assessing whether or not an investment is worth the risk.

Study the latest trends in the world economy, political stability, development, and investment opportunities to profit from low-value or weaker currencies. 

Frequently Asked Questions (FAQs)

1. Why do some countries have weaker currencies than most others?

Global currency rates are affected by several reasons. These include but are not limited to;

• Trade deficit: Countries with high trade deficits experience tremendous pressure on their local currency due to the increased demand for foreign currency to pay for imports. Over time, this can erode the national currency of a country, leading to depleting foreign reserves and inflation.
• Economic growth: The weaker economic growth of a country or a higher international debt-to-GDP ratio often leads to a depreciation of the local currency.
• Political instability: Political turmoil in a country forces people to liquidate assets and invest overseas. This, coupled with changing monetary policies from the leadership to combat the outflow of reserves from the country, can cause any local currency value to take a plunge.

2.  What are the effects of having a weak currency on a country’s economy?

A weaker currency usually has ill effects on the country’s economy. The debt burden gradually increases, especially if the country borrows foreign currencies from other countries. This leads to financial instability and more. The purchasing power of the country and the people decreases quite a lot, making imported goods more expensive and a lower quality of life. 

On the bright side, however, a country with a weak currency tends to attract tourists since their expenditure is lower, and they can still enjoy it. It may also lead to higher exports by the country since the prices become more affordable for international buyers. 

3. What is the most used currency in the world?

The U.S. dollar happens to be the most traded and widely used currency in existence. It functions as a foreign reserve for many countries, and most dollar notes are used outside of U.S. boundaries.

4. What is the world’s most stable currency?

The Swiss Franc (CHF) is the most stable currency in the world since Switzerland has the lowest debt levels globally. That and a great policy for fund mobilizing ensures that the country’s economy is extremely sound. It shows little change and is usually a haven for investors.