Top 10 Weakest Currencies In The World In 2023 – Forbes Advisor INDIA

Many people think of the world’s strongest currency, but the most popular currency is the US dollar. Well, it should because it is one of the most exchanged currencies in the world. Surprisingly, however, the US dollar is not the strongest currency. Kuwaiti Dinar (KWD) instead.

But can you imagine a country where INR 2,000 can make you a millionaire, or where INR 500 is worth hundreds of thousands of dollars? Or where vacations are not a matter of money.

Let’s take a closer look at the world’s richest currency compared to the Indian Rupee.

How are foreign currencies priced?

Foreign or foreign currencies are always traded in pairs. For example, buy Indian Rupees with Vietnamese Dong or Indian Rupees with Iraqi Dinars. As a result, a currency is always priced relative to another currency called an exchange rate.

There are floating currencies. This means that the value of some currencies varies according to supply and demand, and that some currencies are fixed. This means that their values ​​are stable at the agreed rate.

Exchange rates affect the pricing of goods and services in foreign currencies. For example, if the Indonesian rupiah depreciates against the rupee, a vacation in India will cost more in rupiah terms.

What are the top 10 cheapest currencies in the world as of May 2023?

1. Iranian Rial (IRR) 1 INR = 516 IRR

The Iranian rial tops the list of cheapest currencies in the world. A currency’s depreciation can be explained by a variety of factors. First, with the end of the Islamic Revolution in 1979, foreign investors withdrew from the country. The nuclear program and the Iran-Iraq war also played a big role as they created financial difficulties and other political instability in Iran.

2. Vietnamese Dong (VND) 1 INR = 284 VND

The country has long followed a centralized economy. Although the country has embarked on the road to a market economy, it still has a long way to go. The currency is currently heavily devalued, but given the improving economy, it is more likely that the currency will improve.

3. Sierra Leone Leone (SLL) 1 INR = 278 SLL

The Sierra Leonean leone is an African currency that is greatly affected by poverty. Africa has a history of scandals and corruption. The country has witnessed conflicts and vicious civil wars in West African countries. All of this led to the collapse of the country’s economy and values. The Ebola epidemic is an additional constant factor affecting the population of countries that consume more economic aid.

4. Lao or Laotian Kip (LAK) 1 INR = 212 LAK

The Lao or Laotian Kip is not a devalued currency, it has been a low-rate currency since its introduction in 1952. Over the years, the currency’s value has improved. A railway is also planned to connect Beijing with Laos, which could draw investors to the tiny country. The cheapest currency, but a promising currency for increasing value.

5. Indonesian Rupiah (IDR) 1 INR = 179 IDR

The currency hasn’t improved in the last seven years. Factors that have led to currency devaluation include a reduction in foreign exchange reserves. Indonesia is heavily reliant on export markets, and declining commodity prices have further devalued its currency.

6. Uzbekistani Som (UZS) 1 INR = 139 UZS

The Uzbek government has adopted many measures to improve the country’s economy. However, none have proven successful. The most recent are reform measures, so the changes that these measures will bring have not yet been explored in terms of currency values.

Data suggests Uzbekistan resumed internal operations in the third quarter of 2022, but the Covid-19 pandemic has affected the country’s economy.

7. Guinean Franc (GNF) 1 INR = 105 GNF

The country of Guinea faces corruption and political instability that have weakened its currency. The country’s currency value has been devalued over the years.

8. Paraguayan Guarani (PYG) 1 INR = 87 PYG

The country of Paraguay is facing a severe economic depression as a result of high inflation, high unemployment, increasing poverty and corruption. These factors have a negative impact on the value of a currency.

9. Ugandan Shilling (USH) 1 INR = 45 UGX

Uganda faced some setbacks under Idi Amin’s rule. The policies formulated by the president have had a negative impact on the country’s economy, including immigration policies.The impact still affects the country’s development. However, in the last few years, the value has improved, but the devaluation has been less than 5% for him.

10. Iraqi Dinar (IQD) 1 INR = 17 IQD

Iraq’s currency, the Iraqi Dinar, is issued by the country’s central bank and is divided into 1,000 fils. After 1990 inflation made the Fiss less valuable. Over the past decade, the country has also faced political instability.

Featured Partner Offers

International money transfer

Send and receive to over 150 countries

fast and safe

Up to 8x cheaper than traditional banks

Multi-currency account

Holds over 20 currencies

Factors Affecting Exchange Rates

Foreign exchange rates are essential in determining the health of a country’s economy. The value of currency depends on it. Let’s take a look at the key factors that affect the value of a currency.

inflation rate

Market inflation can affect exchange rates. Prices of goods and services rise gradually when inflation is low. When inflation steadily declines, currency values ​​rise and vice versa.

recession

A recession affects a country’s economic growth, and the foreign exchange market is no exception. When the economy is in recession, interest rates go down. As a result, foreign capital will be devalued. If there is little foreign capital and interest rates are low, the value of the currency will fall.

interest rate

Higher interest rates mean that the currency depreciates. This is another important factor that affects exchange rates.

government debt

Government debt, or public debt, is government-owned debt and public liability. If a country faces debt, it can cause inflation and the chances of having more money are slim. Foreign investors will have two thoughts about investing given the high inflation that devalues ​​the currency.

political unrest

Lack of government stability adversely affects a country’s economic performance as a result of investors not getting a return. A stable government attracts many foreign investors. In addition to the increase in foreign capital, investments can increase the value of the domestic currency.

Take a look at the table below to understand the currency value per Indian Rupee as of May 2023.