Currency depreciation: A deep look into the economies of the 10 cheapest countries in the world in 2025

If you are an investor or someone interested in tracking the foreign exchange market, you need to know that the countries with the weakest currencies do not happen by chance, but are the result of deep economic factors. From runaway inflation, political instability, to reliance on natural resource exports. The comparison table below shows current exchange rate data:

Why do currencies depreciate: Fundamental Factors

Before looking into each country, let’s understand that the countries with the weakest currencies often share common issues:

1) Unrelenting inflation - When inflation skyrockets, central banks must print more money to cover deposits. This causes the real value of money to decrease.

2) Lack of economic diversification - Relying solely on agriculture or natural resources. If commodity prices fall, the economy suffers.

3) Political instability - Foreign investors flee, taking foreign currency out of the country, causing the local currency to plummet.

4) Sanctions or international conflicts - Forcing the country to detach from global markets, reducing demand for its currency.

Watch the 10 weakest currencies

1. Lebanese Pound (LBP) - The most devalued currency

89,751.22 LBP = 1 USD

Lebanon is another example of a country in an economic crisis. The Lebanese Pound (LBP) was once pegged to the US dollar, but now has multiple exchange rates. The real value is approximately 89,000 pounds per dollar.

Lebanon’s catastrophe:

• Since 2019, the country has fallen into continuous crisis, with inflation reaching triple digits
• The government defaulted on debt in 2020 for the first time in history
• Banking system collapsed; citizens cannot withdraw their money
• Currency lost 90% of its value compared to parallel markets

To illustrate: if you had 1 million Lebanese pounds, in the past it was worth over 100 million (USD 66,000), but today only about 11,000 baht (USD 11)

2. Iranian Rial (IRR) - Effects of sanctions and governance

42,112.50 IRR = 1 USD

Iran is under economic sanctions from the US and allies for years, due to nuclear programs and international tensions.

Why the Iranian Rial is the lowest in the region:

• Heavily reliant on oil exports; when oil prices fall, the market collapses
• Mistrust among citizens leads to capital flight (capital flight)
• Hyperinflation; poor government management
• Governance and frequent regime changes with dense populations

Result: an Iranian family needs a large bag to store money for everyday purchases.

3. Vietnamese Dong (VND) - Growing economy but weak currency

26,040 VND = 1 USD

Vietnam is an interesting example: an economy growing at 5-7% annually, yet the currency remains weak because Vietnam uses a controlled (Managed Float) policy.

Why Vietnam’s currency depreciates intentionally:

• The central bank controls inflation by keeping the currency weak, making exports cheaper
• Trade surplus and attracting foreign tourists
• A strategic move: boosting economic indicators while weakening the currency

This is an economic doctrine different from many countries; a weaker currency can give a competitive advantage.

4. Laotian Kip (LAK) - Stable economy

21,625.82 LAK = 1 USD

Laos gained independence from France in 1952 and has since improved its economy, but remains one of the least developed countries in Southeast Asia.

Problems in Laos:

• Reliance on agriculture, tourism, and mining
• Lack of modern industries; limited foreign investment
• Post-COVID inflation spike; tourism halted
• Dependent on aid from neighbors like Thailand, Vietnam, China

The Laotian kip remains weak, preventing Laos from entering the broader global economy.

5. Indonesian Rupiah (IDR) - Large Asian economy, still weak

16,275 IDR = 1 USD

Indonesia has a population of over 270 million (4th largest in the world). Despite its size, the rupiah remains weak.

Reasons for rupiah depreciation:

• Heavy reliance on commodity exports (palm oil, coal, metals); prices fall, currency falls
• Emerging markets are sensitive to foreign investor sentiment
• The central bank must constantly intervene to stabilize the market
• Limited foreign reserves prevent aggressive market interventions

Although Indonesia is a major regional economy, economic volatility keeps its currency weak.

( 6. Uzbek Sum )UZS### - Slow liberalization

12,798.70 UZS = 1 USD

Uzbekistan gained independence from the Soviet Union in 1991, introduced the UZS in 1994.

Challenges:

• State-controlled economy; limited foreign investment
• Reliance on agriculture and gas exports
• Slow economic liberalization since 2016
• High inflation, low wages

( 7-10. Guinean Franc )GNF###, Paraguayan Guarani (PYG), Malagasy Ariary (MGA), and Burundian Franc (BIF) - Similar factors

All four countries share common issues:

Shared characteristics:

• Among the poorest countries in the world (Burundi at the bottom)
• Rely on agriculture and mining
• Political instability and decline
• Lack of education, infrastructure, and economic diversification
• High inflation, corruption, weak governance

Specific examples:

• Guinea: Economy heavily dependent on diamond mining, but underperforming
• Paraguay: Economy relies on agriculture (soybeans) and energy exports
• Madagascar: Island nation, impoverished, with limited tourism
• Burundi: Among the poorest, economy depends on peace and foreign aid

Lesson: Big, fragile, and declining

Countries with the weakest currencies are often not due to coincidence. Consider the system:

1. High interest rates → Attract foreign investment → Increase currency demand → Currency appreciates
2. Low inflation → Stable assets → Investor confidence → Currency appreciates
3. Current account surplus (+) → Exports exceed imports → Foreign reserves grow → Currency appreciates
4. Political stability → Investor trust → Currency appreciates

Conversely, economies reliant on natural resources, with political instability, or high inflation tend to see their currencies depreciate continuously.

Even if a currency is weak, some countries (like Vietnam) can still thrive by increasing exports and improving economic structures. Other countries remain trapped in a depreciation cycle, illustrating that the countries with the weakest currencies do not only reflect failure but also fundamental economic and political issues.