In a world where economic stability is a key sign of national strength, some currencies continue to struggle under the weight of inflation, political instability and economic mismanagement. In 2025, the gap between the strongest and weakest currencies in the world remains stark, with some nations grappling with depreciating exchange rates that diminish the purchasing power of their citizens.
From countries battling hyperinflation to those facing sanctions and structural economic challenges, the weakest currencies in the world are a reflection of deeper financial struggles. Whether due to external debt, trade imbalances, or dwindling foreign reserves, these currencies have seen a significant devaluation against stronger benchmarks like the U.S. dollar and the euro.
In this article, we examine the 10 weakest currencies in the world in 2025, exploring the economic forces driving their decline and their impact on everyday life for those who rely on them.
What determines the strength or weakness of a currency?
Several factors influence the strength of a currency, including economic, political and market-driven elements.
Economic factors
A country with a low inflation rate generally experiences a higher currency value, as its purchasing power increases compared to other currencies. Countries experiencing higher inflation usually see depreciation in their currency when compared the currencies of their trading partners. Higher inflation is also usually accompanied by higher interest rates, which is the second factor impacting the strength of a currency.
Interest rates, inflation and exchange rates are interconnected. By altering interest rates, central banks can influence both inflation and exchange rates. Higher interest rates offer banks and other lenders a better return relative to other countries, attracting foreign investing and causing the exchange rate to rise. Strong GDP growth also signals a healthy economy, attracting investment and boosting the currency.
The trade balance of a country also impacts the strength of its currency. A trade deficit shows that a country is spending more on foreign trade than it is earning and that it is borrowing capital from foreign sources to make up the deficit.
High debt levels can also weaken a currency due to default risks and inflationary pressures.
Political factors
Political uncertainty can significantly impact a currency’s value. Frequent government changes, civil unrest, corruption, or sanctions erode investor confidence, leading to capital outflows and currency devaluation. When foreign and domestic investors perceive risk in a country, they move their money elsewhere, weakening the local currency in the process.
A prime example is Lebanon, where years of political turmoil and financial mismanagement have led to the collapse of the Lebanese pound. Similarly, countries facing international sanctions, such as Iran and North Korea, struggle to maintain a stable currency due to restricted access to global financial markets.
Markets and external factors
Beyond domestic economic and political conditions, external market forces play a crucial role in determining a currency’s strength. Global investors, traders and economic trends can either bolster a currency or send it into decline. Foreign exchange reserves are a country’s holdings of foreign currencies, gold, and other liquid assets that can be used to stabilize its own currency. Higher reserves signal economic strength and provide a safety net against financial shocks.
Countries with substantial forex reserves, like China and Switzerland, can use them to influence exchange rates and prevent sharp currency depreciation. In contrast, countries with low reserves struggle to defend their currencies in times of crisis. For example, Pakistan and Sri Lanka have faced currency devaluation due to dwindling reserves, making it difficult to pay for essential imports or service external debts.
For resource-rich nations, the value of key commodities such as oil, gas, gold, or agricultural products has a direct impact on currency strength. When commodity prices rise, countries that export these resources benefit from increased revenue, strengthening their currency. Conversely, when prices fall, these economies suffer, leading to currency depreciation.
A prime example is the Russian ruble, which is highly dependent on oil prices. When global oil prices plummet, Russia earns less from its exports, reducing demand for its currency. On the other hand, nations with stable and diverse economies, like Canada and Australia, can often weather commodity price fluctuations better due to their broader economic base.
The 10 weakest currencies in the world in 2025
According to the latest classification by Wise, the 10 weakest currencies in the world in 2025 are:
1. Lebanese pound
Topping the list of the weakest currencies in the world is the Lebanese pound (LBP), which has been at or near the top of this list for a few years now. Once pegged at LBP1,500 to the U.S. dollar, the Lebanese pound has lost more than 98 percent of its value since Lebanon’s financial crisis erupted in 2019. According to the World Bank, inflation averaged 171.2 percent in 2022, one of the highest rates globally, predominantly driven by the rise in prices of food.
The LBP’s dramatic devaluation was driven by a combination of hyperinflation, economic mismanagement, political instability and a banking sector in crisis. Today, the LBP continues to hover at catastrophic lows, leaving millions of Lebanese citizens struggling with the effects of economic collapse.
2. Iranian rial
The Iranian rial (IRR) has been suffering ever since the U.S.-Iran nuclear deal fell through in 2015, when heavy sanctions were also imposed on the country. The rial went into freefall, stabilised in recent years and then experienced new pressure due to flaring tensions in the Middle East.
In 2015, the Iranian rial was worth IRR32,000 to the dollar, but by July of the same year, it had plummeted to IRR584,000 to the dollar. Renewed geopolitical tensions in the Middle East have recently exerted additional pressure on the currency, leading to further depreciation. Recently, it dropped even further, with exchange shops in Tehran trading IRR930,000 for every dollar.
3. Vietnamese dong
Third on the list of the world’s weakest currencies is the Vietnamese dong (VND). The VND has experienced notable depreciation in recent years, influenced by various economic and policy factors.
According to the World Bank, the official exchange rate of the VND against the U.S. dollar has shown a gradual depreciation over the past decade. In 2015, the average exchange rate was approximately VND21,697 per U.S. dollar. By 2023, this rate had shifted to around VND23,787 per U.S. dollar. In 2024 alone, the currency lost about 4 percent of its value, most recently trading at VND25,574.99 to the dollar.
4. Laotian kip
The Laotian kip (LAK) is one of the weakest global currencies due to a combination of factors. This decline is primarily attributed to high inflation, sluggish economic growth and escalating foreign debt.
According to the World Bank, the kip weakened by 19 percent against the U.S. dollar at the official rate and 28 percent on the parallel market from January to September 2024. This depreciation has substantially increased the cost of imports, exacerbating inflationary pressures within the country. This fall pushed up consumer price inflation to an average of 25 percent over the same period.
5. Sierra Leonean leone
The fifth weakest currency in the world is the Sierra Leonean leone (SLL). Similar to the Laotian kip, the SLL’s value has been affected by a combination of different factors, including high levels of debt and inflation, slow economic growth, as well as the lasting effects of major health crises such as the Ebola virus outbreak.
In 2023, Sierra Leone’s economic growth slowed to 2.6 percent, down from 3.5 percent in 2022. This deceleration was accompanied by a sharp rise in inflation, which accelerated from 27 percent in 2022 to 46.6 percent in 2023.
The Ebola virus outbreak between 2014 and 2016 had a profound impact on Sierra Leone’s economy, leading to decreased exports and economic contraction during the crisis period. The aftermath of the outbreak continued to affect economic stability, contributing to the challenges faced by the leone.
6. Indonesian rupiah
The Indonesian rupiah (IDR) is one of the world’s weakest currencies. It has recently depreciated to levels not seen since the 1998 Asian financial crisis. As of March 2025, the rupiah traded at approximately 16,559.99 per U.S. dollar, nearing its June 1998 record low of 16,800.
Contrary to concerns about high inflation, Indonesia’s inflation rate has remained relatively low. In December 2024, the year-on-year inflation rate was 1.57 percent, marking the lowest annual inflation since records began in 1958.
The depreciation of the rupiah is largely attributed to investor apprehension regarding expansive fiscal policies introduced by President Prabowo Subianto. Initiatives such as a $28 billion-a-year program for free meals for schoolchildren and pregnant mothers have raised concerns about fiscal prudence and potential economic instability. In response to the currency slide, Bank Indonesia has intervened in the bond and currency markets to stabilize the rupiah, attributing the depreciation to global uncertainties and domestic policy concerns.
7. Uzbekistan som
Despite Uzbekistan having substantial oil and gas reserves, a key feature of countries with some of the world’s strongest currencies, the Uzbekistan som (UZS) has continued to struggle in recent years.
In 2017, Uzbekistan initiated currency reforms by devaluing the som by approximately 50 percent, setting the exchange rate at UZS8,100 per U.S. dollar from 4,210 previously. Prior to these reforms, the som was heavily controlled, leading to a substantial gap between official and black-market rates. This adjustment aimed to unify exchange rates and attract foreign investment
The UZS depreciated by 4.47 percent against the U.S. dollar in 2024, marking a slower pace of devaluation compared to previous years. According to data from the Central Bank of Uzbekistan, the exchange rate at the end of 2023 was UZS12,352 per dollat, which increased to UZS12,904 per dollar by the end of 2024.
8. Guinean franc
The eight weakest currency in the world is the Guinean Franc (GNF). The GNF has experienced significant depreciation over the past decade, positioning it among the world’s weakest currencies. As of March 2025, the exchange rate stood at approximately GNF8,655 per U.S. dollar.
The Guinean franc has continuously depreciated in real terms since 1989. By the end of 2004, it had lost about 40 percent of its value in real terms. In March 2005, the Guinean authorities adopted a flexible exchange rate regime by ending the official auctions and allowing banks and authorized exchange bureaus to buy and sell foreign exchange at the market rate.
Guinea’s economy is fueled by a rich reserve of minerals, gold, high-grade iron ore, and diamonds. Additionally, it boasts one of the world’s largest reserves of bauxite, which is one of the main exports of the West African nation. However, the country has faced stalled economic growth because of political instability. Additionally, the Ebola virus slowed down Guinea’s economic growth in 2014 and 2015. However, the country’s GDP grew by 3.9 percent in 2021 and the GNF has recently been showing signs of stabilizing.
9. Paraguayan guarani
Paraguay’s guarani (PYG) has suffered from persistent issues with inflation, making it one of the world’s weakest currencies. The PYG is also impacted by corruption and counterfeit currency. As of March 2025, the exchange rate is approximately PYG7,975.30 per U.S. dollar.
In 1943, the Paraguayan government authorized the replacement of the peso with the PYG as legal tender. It was exchanged at a rate of one guarani to every 100 pesos. This exchange rate was intended to curb inflation. However, the guarani suffered from the same inflationary problems as its predecessor.
The government then initiated a peg to the U.S. dollar (USD) in 1960, which would last until 1985. However, the value of the currency continued to erode on the black market and then more rapidly once the peg was abandoned.
Since 1985, the value of the guarani has continued to decline sharply. For instance, $1 was equal to PYG4,500 in 2010, and by 2018, it was worth PYG5,700. By 2020, it fell further to PYG7,000.
10. Malagasy ariary
Last on the list but still one of the world’s weakest currencies is the Malagasy ariary (MGA). Madagascar’s currency experienced a significant drop in value around 2009, caused by a mix of natural disasters, political instability and the fallout of the global financial crisis.
In recent years, the situation has worsened further, with the MGA being made weaker by high inflation and an unwillingness for foreign investors to invest in Madagascar. Currently, the Malagasy ariary trades at around MGA4,665 to the U.S. dollar.
How are overseas currencies priced?
Overseas currencies, or foreign currencies, are priced based on the foreign exchange (forex) market, where currencies are traded globally. Several factors influence how a currency is priced, and it involves the interaction of supply and demand between different currencies. If demand for the currency is high, the value will increase. If demand is low, this will drive that currency price lower.
A nation’s GDP, the strength of its foreign trade, and the size of its public debt all influence the value of its currency on the open market. The currencies of most of the world’s major economies were allowed to float freely following the collapse of the Bretton Woods system between 1968 and 1973.
Exchange rate types:
Floating exchange rate: Most currencies, including the U.S. dollar, the euro and the Japanese yen, are priced according to supply and demand in the forex market. Their value fluctuates freely based on various factors such as economic performance, inflation, political stability and interest rates.
Fixed or pegged exchange rate: Some currencies are pegged or tied to the value of another stronger currency. The government or central bank of a country that uses a pegged exchange rate controls the currency’s value by buying or selling its currency in the forex market.
Why do some currencies lose their value?
Currencies can lose their value for a variety of reasons, often linked to economic, political, or market factors. Inflation is one of the most common causes of a currency losing value. When a country experiences high inflation, the purchasing power of its currency decreases, meaning it takes more of that currency to buy goods and services.
This often leads to a vicious cycle. As inflation rises, the value of the currency decreases, leading to even higher inflation as imports become more expensive, which further erodes the currency’s purchasing power. Countries with hyperinflation, like Zimbabwe and Venezuela, have seen their currencies lose virtually all of their value over time.
Political instability or uncertainty can also severely damage investor confidence in a country’s currency. When a country faces frequent changes in government, corruption, conflict, or unrest, foreign investors may shy away, leading to a decrease in demand for the currency.
In extreme cases, political instability can lead to currency crises where the currency loses its value dramatically. For instance, Argentina’s peso has lost significant value during periods of political uncertainty and economic mismanagement.
A country’s trade balance, the difference between its imports and exports, can also affect its currency’s value. If a country imports more than it exports, it needs to buy more foreign currency to pay for those imports, which can put downward pressure on the domestic currency. The U.S. dollar, for example, has traditionally weakened during periods of large trade deficits.
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Frequently asked questions
1. What is the weakest currency in the world?
Topping the list of the weakest currencies in the world in 2025 is the Lebanese pound (LBP), which has been at or near the top of this list for a few years now
2. Why is the Lebanese Pound so devalued?
Once pegged at LBP1,500 to the U.S. dollar, the Lebanese pound has lost more than 98 percent of its value since Lebanon’s financial crisis erupted in 2019. The LBP’s dramatic devaluation was driven by a combination of hyperinflation, economic mismanagement, political instability and a banking sector in crisis.
3. Is the Vietnamese Dong expected to rise in value?
The Vietnamese dong (VND) is currently trading near its lowest levels against the U.S. dollar. The State Bank of Vietnam has indicated plans to maintain a flexible monetary policy to manage inflation and stabilize the currency. However, challenges such as rising non-performing loans and potential external economic pressures, including policies from major trading partners like the United States, could impact the dong’s value.
While the Vietnamese dong is not expected to appreciate in value, the rate of depreciation is projected to be moderate, influenced by both domestic monetary policies and external economic factors.
4. Can a weak currency be beneficial?
A weak currency can benefit a country’s economy by boosting exports, attracting foreign investment, and encouraging tourism. However, it can also lead to higher import costs and inflation. The overall impact depends on how well the country manages these effects.
5. Which currency is the most stable in the world?
The Swiss franc (CHF) is widely considered the most stable currency in the world. It is backed by Switzerland’s strong economy, low inflation and political stability. The Swiss National Bank (SNB) maintains conservative monetary policies, making the currency a safe haven during times of global economic uncertainty. Being tied to gold also adds to the status of a “safe currency”.
6. What are the strongest currencies in the world?
According to Wise, the strongest currencies in 2025 include the Kuwaiti dinar, the Bahraini dinar, the Omani rial, the Jordanian dinar and the British pound.
