Most people know that the Pound Sterling, Euro, and Swiss Franc are among the most valuable currencies in the world. The exchange rates of these currencies remain fixed because the economies of the countries that issue them are relatively stable.
On the opposite side of the spectrum, some currencies have high exchange rates and fluctuate frequently. The instability of these currencies can be attributed to multiple factors, including war, poor governance, and high inflation.
Identifying what currency has the least value is a little tricky because most inflated currencies rise and fall rapidly. However, in this blog, we will list the ten least valuable currencies in the world as of early 2022.
1. Iranian Rial
1 USD = 42,193 IRR
Currently, the least valuable currency in the world is the Iranian Rial (or “toman” as locals call it). Rial’s devaluation can be traced to the 1979 Islamic Revolution led by Ayatollah Khomeini. As a result, many businesses shut down, and relations with the West severed. The Iran-Iraq war in the 80s, threats from Israel, and possible nuclear warfare followed these events, which led to a 400% depreciation of the Iranian Rial.
Iran has one of the largest oil reserves in the world. But because of Western sanctions, the country couldn’t export its oil, which resulted in a severe recession in Iran’s economy. The situation slightly improved in 2016, when the United States and Europe lifted some sanctions. However, in 2018, the U.S. sharpened the sanctions again, claiming that the Iranian government was still pursuing a nuclear mission. Just when things started looking better, the country’s national budget faced another deficit.
In May 2020, Iran came across high inflation, so the government decided to cut four zeros from the rial’s face value. For example, 50,000 rials would change to 5 rials or tomans. Even after removing the zeros, the Iranian Rial remains the least valuable currency as of 2022. Currently, one U.S. Dollar is equal to 42,193 rials.
2. Vietnamese Dong
1 USD = 22,653 VND
The second least valuable currency at the moment is the Vietnamese Dong. Vietnam is currently in a transitional phase in its history. The country launched an economic reform policy called Đổi Mới in 1986 that sought to move Vietnam from a communist economy to a socialist one.
The policy continues to be in practice and has elevated Vietnam from a low-income country to a lower-middle-income one. The country has improved in multiple economic and socioeconomic indicators, including life expectancy rate, GDP per capita, and universal health coverage.
Currently, one U.S. Dollar values 22,653 Vietnamese Dongs, making it the second lowest valued currency in the world. However, experts believe that Vietnam is on the right economic path and soon may not even be on the list of lowest currencies in the world.
3. Indonesian Rupiah
1 USD = 14,363 IDR
In reality, Indonesia is an economically stable country in Asia and is actually a member of the G20 group, which includes the largest economies in the world. However, Indonesia’s weak currency is due to the low value of its old-style banknotes. The banknotes were originally introduced with very high exchange rates and have remained that way ever since. At present, one U.S. Dollar is equivalent to 14,363 Indonesian Rupiahs.
The Indonesian government has attempted to reform the country’s currency multiple times but with no luck. One of the recent tries was in 2016 when the country issued seven new banknotes meant to replace the old ones. Despite these reforms, the Indonesian Rupiah remains one of the cheapest currencies when compared to the U.S. Dollar.
4. Lao or Laotian Kip
1 USD = 11,439 LAK
The Laotian Kip is the only currency on this list that hasn’t fluctuated much over the years. Since its introduction in 1952, the Lao Kip has maintained stable exchange rates relative to the U.S. Dollar. Currently, 1 U.S Dollar values 11,439 Laotian Kips.
The high exchange rate is because of the large denominators of kip banknotes. Similar to the Indonesian Rupiah, the Lao Kip was also originally issued at high exchange rates, with the banknotes ranging from 1 to 100,000 kips. Laos’s economy began developing after the collapse of the Soviet Union. As a result, the country began reshaping its economic policy in the 90s. Fortunately, the Laotian Kip has been significantly improving in recent years and is predicted to continue appreciating in the future.
5. Sierra Leonean Leone
1 USD = 11,392 SLL
Sierra Leonean Leone is the least valuable currency in Africa. Its low valuation can be attributed to multiple factors. One such factor is that Sierra Leone is one of the poorest countries in the world, with 57% of the population living below the poverty line. Additionally, the country also faced a civil war in the 90s that left a dark stain on its economy. Moreover, Sierra Leone suffered greatly from the Ebola virus spread in 2014, leading to a humanitarian crisis.
As a result of all these combined factors, the value of the leone has significantly decreased. In August 2021, the government decided to cut four zeros from the banknotes to tackle ongoing inflation. As of now, one U.S. Dollar is worth 11,392 SLL.
6. Uzbek Som
1 USD = 10,839 UZS
Located in Central Asia, Uzbekistan’s currency is the lowest value in the region and among all post-Soviet countries. Breaking away from the Soviet Union in 1991, it introduced the Uzbek Som (sometimes referred to as “sum” or “soum”) in 1994, which replaced the Russian Ruble.
In 2017, Uzbekistan’s President Shavkat Mirziyoyev vowed to liberalize the country’s monetary policy. As a result, the USD exchange rate rose from 4,210 soms to 8,100 soms. The government also lifted restrictions on foreign currency purchases the same year. As of today, one U.S. Dollar values 10,839 Uzbek Soms.
7. Guinean Franc
1 USD = 9,055 GNF
The Guinean Franc is the official currency of the Republic of Guinea, located in West Africa. Guinea has rich reserves of gold, diamonds, and aluminum and is one of Africa’s largest exporters of bauxite. Yet it has one of the most inflated economies in the world.
The blame for Guinea’s poor economy falls mainly on the country’s political instability. In addition, about 44% of the population lives below the poverty line, and organized crime is prevalent in the country. On top of that, the 2014 Ebola outbreak affected the country’s economic growth for several years. However, the situation improved slightly in 2019 when the country recorded a 5.6% economic growth. Currently, one U.S. Dollar is equal to 9,055 Guinean Francs.
8. Paraguayan Guarani
1 USD = 6,986 PYG
The Paraguayan Guarani is the cheapest currency in the Americas. Despite being one of the leading exporters of soybeans and cotton, Paraguay’s economy is struggling to maintain stability. Ever since its launch in 1944, the country’s currency has faced severe inflation, which caused continuous devaluation.
The main reasons for Paraguay’s weak economy are the country’s high foreign debt and high unemployment rate. In addition, the country’s financial system was also involved in multiple corruption scandals, which caused several important banking institutions to shut down. Due to these issues, Paraguay is currently in a financial crisis, and its currency has an exchange rate of 6,986 guaranis to a dollar.
9. Cambodian Riel
1 USD = 4,067 KHR
Cambodia is a South West Asian country that uses the Cambodian Riel as its official currency. Interestingly, the history of the riel’s devaluation is different from the other currencies on this list.
Introduced back in 1995, the riel was not widely accepted by the Cambodian population, who preferred using the U.S. Dollar instead. To this day, international travelers may hardly find anyone who accepts the riel in urban areas. This is because about 90% of the economy is dollarized, and the riel is only prevalent in some rural areas.
The limited use of the Cambodian Riel has drawn the currency to devalue over the years. The current exchange rate is 4,067 riels for one U.S. Dollar.
10. Colombian Peso
1 USD = 3,937 COP
The Colombian Peso started declining in the 1980s. Colombia fell into a financial crisis, and the government heavily regulated foreign investments while battling local drug cartels, which affected the foreign exchange market.
Additionally, falling oil prices are one of the most significant reasons for the Colombian Peso’s depreciation in recent years. More than 45% of Colombian exports include oil and gas products. Like other oil-dependent countries, Colombia is currently trying to diversify its employment sector. However, given the political unrest in the country, it may take a while for the Colombian Peso to stabilize again.
One U.S. Dollar is currently equivalent to 3,937 pesos.
Conclusion
Currencies usually devalue because of economic turndowns or political unrest in countries issuing them. These typically include inflation, poor monetary policy, wars, or internal conflicts.
It is difficult to identify what currency is worth the least because of the ever-changing pattern of some currencies. Right now, the Iranian Rial is the least valuable currency compared to the United States Dollar. However, economies around the world may change in the coming years, warranting a new top ten list.
