Currency devaluation experienced by many countries is often caused by economic downturn within a country, which leads to balance of payments deficit and the inflation rate to grow. This may be as a result of a series of economic downslide such as war actions, GDP decreasing, commodities devaluation serving as exports basics, purchasing power falling, credit conditions tightening, political instability inside a country and so on. Devaluation is an official lowering of the value of a country’s currency within a fixed exchange rate system. According to Investopedia “a weak currency is one whose worth has decreased in value in comparison to other currencies. It is commonly found in nations with poor economic fundamentals, which may include a high rate of inflation, chronic current account and budget deficits, and sluggish economic growth.”
Currency devaluation is often linked to incorrectly organized monetary policy and relating decisions of fiscal controls or the Central Banking System within a country. Here are 5 countries with the weakest currencies in comparison with the global exchange rate of 2018:
- Iran (Rial): 1 USD = 42515 IRR
- Vietnam (Dong): 1 USD= 22886 VND
- Indonesia (Rupiah): 1 USD = 14066 IDR
- Guinea Republic (Franc): 1 USD = 9030 GNF
- Lao (Kip): 1 USD = 8415 LAK
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