Clare: An Arab currency stronger than the US dollar.. “Forbes” monitors the 10 weakest monetary currencies in the world
7/18/2023
The American “Forbes” magazine discussed the 10 weakest currencies in the world, of which the Iranian riyal is the weakest, as well as the Lebanese pound, at a time when the Kuwaiti dinar is actually the strongest currency, even against the US dollar, which remains among the strongest currencies in the world.
The American report, translated by Shafaq News agency, pointed out that the US dollar is seen as the strongest currency in the world and is the most traded, at a certain level, but it is actually not the strongest currency, but rather the Kuwaiti dinar.
Currency pricing
The report reviewed how foreign currencies are priced, explaining that foreign currencies are traded in pairs, for example, the purchase price of the US dollar is using the pound sterling, and as a result, the currency is always priced in relation to another currency, which is known as the “exchange rate”.
The report indicated that most currencies are “floating”, which means that their value fluctuates according to supply and demand, but some currencies are “pegged”, which means that their value relative to another currency (such as the US dollar) is fixed at an agreed upon price.
The report pointed out that exchange rates affect the cost of goods and services in a foreign currency. For example, if the pound sterling rose against the dollar, vacation expenses in the United States would be less expensive in terms of the pound sterling.
He added that exchange rate movements provide an opportunity for investors seeking to make profits through trading foreign currencies.
Then the report reviewed the ten most vulnerable currencies in the year, according to an assessment based on the number of foreign currency units that are obtained for one US dollar.
Iranian riyal
The report considered that the Iranian riyal is the weakest currency in the world, as one riyal buys only 0.000024 US dollars (meaning that one dollar equals 42,273 Iranian riyals).
He pointed out that the Iranian rial was introduced for the first time in the late 18th century, and was later linked to the pound sterling, and then to the US dollar.
He added that although the currency is now floating, it has remained at around 42,000 riyals to the dollar over the past few years.
Despite Iran’s leadership in oil and gas, economic sanctions have put pressure on the Iranian currency, in addition to political unrest and high inflation.
Vietnamese dong
The report stated that the Vietnamese dong is considered the second weakest currency in the world, as one dong buys 0.000042 US dollars (or one dollar equals 23,711 Vietnamese dong), a process that began trading in 1978.
He added that services represent the largest proportion of the gross domestic product, followed by industries such as electronics, energy and textiles, but the currency has been affected by restrictions on foreign investment and the recent slowdown in exports, along with high interest rates in the United States.
Laotian Cape
The report pointed out that the Laotian kip is the third weakest currency, as one kip buys $0.000052 (or $1 equals 19,072 Laotian kip), a currency introduced in the fifties of the last century, and it is a floating currency.
Laos relies heavily on exports such as copper, gold and timber, but the economy has been hit by slowing economic growth, high external debt and inflation, which put pressure on the national currency.
Sierra Leone
As for the fourth weakest currency in the world, it is the Sierra Leonean leone, where one leone buys 0.000057 dollars (or the dollar equals 17665 Sierra Leonean leone), and it was introduced in 1964, and is fully floating.
He added that the main exports of Sierra Leone include timber and minerals such as diamonds, gold and industrial minerals, and the value of the leone currency has declined due to inflation that exceeded 40%, in addition to large debts, slow economic growth and the economic effects of the Ebola virus outbreak.
Indonesian rupiah
The Indonesian rupiah is considered the fifth weakest currency in the world, as 1 rupee buys 0.000067 US dollars (or 1 dollar equals 14,993 Indonesian rupiahs), and was introduced in 1946 and was initially pegged to the US dollar before moving to a free float.
The report described Indonesia as the largest country in Southeast Asia in terms of gross domestic product, thanks to the services sector.
Lebanese pound
According to the report, the Lebanese pound is considered the sixth weakest currency in the world, as one pound buys 0.000067 US dollars (or the dollar equals about 90,000 Lebanese pounds). The lira was introduced for the first time in the 1930s and is linked to the US dollar.
He pointed out that Lebanon has an economy based on services, but it also exports precious stones, minerals, chemical products, food and beverages.
He added that the lira fell to a record level against the US dollar in early 2021 due to the severe economic recession, high inflation, unemployment, the banking crisis and political unrest.
Som Uzbekistan
The report stated that the Uzbekistani som is the seventh weakest currency in the world, as 1 som buys 0.000087 dollars (or 1 dollar equals 11.516 Uzbekistani som), a currency introduced in 1993 and fully floating.
Uzbekistan is considered one of the leading countries in the export of cotton and has large reserves of minerals, oil and gas. It is implementing economic reforms, but it still suffers from low economic growth, high inflation, unemployment and corruption.
Guinea franc
As for the eighth weakest currency, it is the Guinean franc, where one franc buys 0.000116 dollars (or 1 dollar equals 8583 Guinean francs). The currency was introduced in 1959 and is fully floating.
Although Guinea has an abundance of natural resources such as gold and diamonds, it has suffered from increasing rates of inflation, military unrest and the influx of refugees from neighboring Liberia and Sierra Leone.
Paraguayan Guaraní
And the Paraguayan guarani comes in ninth place, where 1 guarani buys 0.000138 dollars (or 1 dollar equals 7249 Paraguayan guarani), and it was introduced in 1952 and is fully floating.
Although Paraguay is a major producer of soybeans, stevia (a sugar substitute) and beef, as well as exports of corn and sugarcane, it has been pressured by soaring inflation, corruption and counterfeiting of currency.
Ugandan shilling
The Ugandan shilling is considered the tenth weakest currency in the world, as the Ugandan shilling buys 0.000273 dollars (or the dollar equals 3669 Ugandan shillings), and it was introduced in the year 1966, and it is floating freely.
Although the country is rich in commodities such as oil, gold and coffee, its economy suffers from unstable growth, high debt and political turmoil. LINK
