Even before and after the onset of the 2020 Covid-19 epidemic, the Iranian Rial was and still is the least valued currency in the world. I found it surprising that even though African currencies may not be the strongest, only three African countries are in the top 10 list of weakest or lowest currency in the world.
1. Iranian Rial:
2. Vietnamese Dong:
3. Indonesian Rupiah:
4. Guinean Franc:
5. Lao or Laotian Kip:
6. Sierra Leonean Leone:
7. Uzbekistani Som:
8. Paraguayan Guarani:
9. Cambodian Riel:
10. Ugandan Shilling:
Reasons Behind Irans Weak Currency – Iranian Rial
The Iranian Rial, the official currency of Iran, is the least valued currency in the world. It is the lowest currency to USD and is officially the world’s cheapest and weakest currency, even though the Middle-Eastern country is rich in oil. These are the main reasons that led to the decline of the Iranian Rial:
1. War between Iran and Iraq.
2. Threats faced by Israel.
3. Dangers of possible nuclear warfare.
4. Sanctioned by the US for oil exportation.
5. Restriction of Iran’s access to the world’s market.
6. Mismanagement and corruption.
7. High demand for dollars among Iranians who fear the effects of sanctions.
All of these events led to the dropping of the Iranian Rial as the lowest valued currency. The United States of America and the European Union, in 2016, lifted a few sanctions leading to an improvement of ‘Iran’s economic situation and stabilization of the Rial. However, in 2018, The United States of America imposed and sharpened their sanctions again.
First World Currency v/s Today’s Most Traded Currencies:
In the 17th and 18th centuries, the first world currency was the use of silver Spanish dollars or eight-real coins, also known as “pieces of eight” extended from the Spanish territories in the Americas westwards to Asia and eastwards to Europe, forming the first worldwide currency.
The Swiss franc, the Canadian dollar, the Australian and New Zealand dollars, and the South African rand round out the list of top tradable currencies to buy now. Investors can decide to invest in some of the most popular currency pairs such as the EUR/USD, GBP/USD, EUR/GBP, AUD/USD, or USD/CAD.
Although the State of Kuwait is also a relatively small country, it has the most expensive currency in the world, the Kuwaiti Dinar (KWD) currently being worth USD 3.31. Its economy is based primarily on petroleum which covers almost half of the GDP and no less than 94% of the export revenues. You will receive just 0.30 Kuwait dinar after exchanging 1 US dollar, making the Kuwaiti dinar the world’s highest-valued currency unit per face value, or simply ‘the world’s strongest currency’.
Today, the eight most traded currencies (in no specific order) are:
1. the U.S. dollar (USD)
2. the Canadian dollar (CAD)
3. the euro (EUR)
4. the British pound (GBP)
5. the Swiss franc (CHF)
6. the New Zealand dollar (NZD)
7. the Australian dollar (AUD)
8. the Japanese yen (JPY)
African Currencies and the Devaluation of Nigerian Naira:
From the day that Nigeria’s Abacha took power to the day he died on June 8, 1998, a period of about 5 years, the ‘official’ exchange rate of the Naira to the Dollar never changed from 22 Nigerian Naira to $1 USD.
Today, it is no longer news that the plunging oil prices have increased pressure on the Naira. Nigeria, which is Africa’s largest economy, exports mostly crude oil, but it spends its foreign earned currencies on supplies abroad for basic items such as food, wears, electronics, and refined petrol.
Goldman Sachs Group, a leading global investment banking firm, has predicted that a significant devaluation of the Nigerian Naira is expected within the next 12 to 18 months of July 2020.
Africa’s smallest country, Sao Tome And Principe, also has the continent’s weakest currency called the Dobra, with $1 USD going for 21,050.59 STD in 2020.
The Libyan Dinar (1 USD = LD 1.41) has always been the strongest currency in Africa. It has been gaining its strength in recent times because of the strict monetary policy introduced by the country’s central bank.