What Currency has the least Value?

Currency is a very important part of an economy as it provides individuals access to means and increases their purchasing power.

The entire financial system uses currency as a medium of exchange between two people for various goods and services.

Every country has a set value for their currency which fluctuates due to the monetary and fiscal policy of the country. Low-value currency may be good for exports and earning foreign exchange but may cause the purchasing power of the individual to go down.

It is a tightrope that needs a lot of balancing and it involves a lot of factors. In this article, we will discuss what currency has the least value, the list of weakest currencies in the world, countries with high inflation, and much more.

List of weakest Currency in the World

The following is the list of the weakest currencies in the world-

Currency	1 INR Value (As of November 2023)
Iranian Rial	507.33 IRR
Vietnamese Dong	295.15 VND
Lao/Laotian Kip	247.46 LAK
Sierra Leonean Leone	237.30 SLL
Indonesian Rupiah	190.56 IDR
Uzbekistani Som	146.41 UZS
Guinean Franc	102.71 GNF
Paraguayan Guarani	89.20 PYG
Ugandan Shilling	45.25 USH
Iraqi Dinar	15.66 IQD

Reason for Weak Currency

The following are the reasons which contribute to a reduction of the value of the currency-

Over Printing

Over Printing money is the biggest cause that contributes to the rapid devaluation of the currency. The monetary policy of the country determines the printing and value estimation of the currency.

Money cannot be printed out of thin air, it requires substantial backing either via debt or an asset like gold. The printed money is injected into the economy by favorable interest rates for loans, Government expenditures, various projects, etc.

 But when the over-printing is done, it severely devalues the currency and investors start pulling out the money from the market and storing it in a strong-value currency like dollars which in turn further devalues the currency.

The prime example of how over-printing destroys the economy of the country is Zimbabwe, here the government over-printed the currency during the 2000s, which led to economic disaster.

Due to this Hyperinflation occurred in Zimbabwe and Zimbabwe joined the list of countries using US Dollars instead of their currency.

Similarly, Venezuela also over-printed and lost economic growth, and Argentina also over-printed and has seen a downward spiral ever since.

Increased Oil Price

Energy is the most important factor that any economy needs to fulfill its economic requirements. The Industrial Revolution of the 19^th and 20^th century was fueled by the extraction of the oil.

When oil prices go up, the global economy goes under strain, and countries especially which are heavily dependent on import of the oil like India, China, etc. have to face the economic strain.

The economic strain further increases the demand of dollars for purchasing oil from the market which in turn devalues the currency of other countries.

Sanctions

Sanctions are the mechanism developed by the United States to punish all those countries that do not enjoy good relations with the West.

All the financial systems in the world are connected to the International Monetary Fund and World Bank, United Nations, Swift, etc.

All these are international organization however, the control over these organization is with the United States and most of the organization is located in the US.

This control also provides the United States power to put sanctions on the country that it dislikes over various issues like Human Rights issues, geopolitical issues, etc.

A unilateral sanction was put by the collective West on Russia North Korea, and Iran due to their geopolitical standing of anti-west.

Any country going through sanctions will be cut off from this financial institution and the trade between the countries will have to be done using other currencies like Yuan, Rupee, or Rubel instead of Dollars.

Dollars are used for trading between two countries and when the sanction is put in, the dollar trade becomes impossible making it tough for the countries to trade hence, reducing the demand for the local currency and therefore, reducing the value of the currency.

Inflation

Inflation is yet another factor that contributes to the lower economic output as well as the low value of the currency.

Inflation hits an economy when the oil prices are high, over-printing, or restriction of Essential goods like food and other supplies.

When inflation hits, the prices of commodities and other essential goods and services go up including the Repo rate.

Repo Rate is the rate at which the central bank lends money to the commercial banks which then pass on to the general public for lending.

In this setup, if the Repo Rate goes up, the lending for the public becomes costly so low customers will turn up for loans which cuts off the access to capital for people.

This reduction of the capital from the market causes economic growth to stump and it leads to lower economic activities which further results in a reduction of the currency value.

Countries with Highest Inflation

High inflation often devalues the currency and makes it tough for the citizens to afford things. The following are the countries with the Highest inflation rate which may reduce the currency value of that country as well-

Country	Symbol	CPI Inflation (%)
Lebanon	LBN	171.2055
Sudan	SDN	138.8085
Zimbabwe	ZWE	104.7052
Turkiye	TUR	72.30884
Suriname	SUR	52.44603
Sri Lanka	LKA	49.7211
Haiti	HTI	33.98393
Ghana	GHA	31.2559
Moldova	MDA	28.7373
Sierra Leone	SLE	27.20829
Lao PDR	LAO	22.95622
Malawi	MWI	20.95397
Ukraine	UKR	20.18364
Pakistan	PAK	19.87386
Lithuania	LTU	19.70505
Estonia	EST	19.39826

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