Indonesia Among Top 5 Weakest Currencies in the World in 2024

TEMPO.CO, Jakarta - Currencies reflect the stability of a country's economy and the attractiveness of its international markets. However, some are compelled to hold weak values due to volatile economic conditions.

The high or low valuation of a currency is determined by its exchange rate against the global benchmark, the US dollar, which is the most highly valued and widely traded currency worldwide. Numerous factors, such as inflation, political stability, and dependence on certain economic sectors, influence currency exchange rates in each country.

Therefore, countries with the weakest currencies are a major concern for economic observers and market players as currency not only functions as a medium of exchange but also reflects the economic, political, and social conditions of a country as a whole.

Here is a list of the top five weakest currencies in the world:

1. Iranian Rial (IRR)

The Iranian rial is now the weakest currency in the world, with one Iranian rial worth a mere 0.000024 US dollars, or in other words, 1 US dollar is equivalent to 42,300 Iranian rials. The weak value is estimated to be caused by several factors, including the impact of the Islamic revolution in 1979, followed by the withdrawal of foreign investors from the country and economic sanctions.

2. Vietnamese Dong (VND)

Right below the Iranian rial is the Vietnamese dong, with one dong worth 0.000043 US dollars, or 1 US dollar is equivalent to 23,485 Vietnamese dong. This is attributable to several factors, including poor real estate market conditions and restrictions on foreign investment. Additionally, the recent slowdown in export activity has also worsened the country's economic situation.

3. Sierra Leonean Leone (SLL)

Sierra Leone, a country in Africa, has the lowest-value currency in the world, with an exchange rate of 1 SLL at 0.000051 US dollars (1 USD = 21,786 SLL) as of August 2023. One of the main causes of the weak currency was the inflation rate reaching more than 43 percent in April 2023. The situation was further exacerbated by armed conflict and the Ebola virus outbreak that hit several regions in Africa, hampering the country's economic growth.

4. Laotian Kip (LAK)

The Laotian currency is ranked fourth among the world’s weakest currencies, with 1 kip buying 0.000057 dollars (or 1 US dollar equaling 17,692 Lao kip). One of the factors causing the weak currency is the country’s slowing economic growth and high foreign debts.

5. Indonesian Rupiah (IDR)

Indonesia is unfortunately included in the list of the top 5 countries with the weakest currency value in the world this year. The exchange rate of 1 rupiah is 0.000063 USD (1 USD = 15,900 rupiah)  as of early April 2024.

The decline in the rupiah value against the US dollar was blamed on several factors, such as the trade balance deficit, inflation, high foreign debts, and the impact of the COVID-19 pandemic, which hampered Indonesia's economic growth.

SHARISYA KUSUMA RAHMANDA | LAILI IRA | ANDIKA DWI

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