The world's smallest currencies: Why are these losing value in 2025

Economic volatility and political instability are the main reasons why many currencies have become the least valuable in the world. From soaring inflation rates to lack of economic diversification and foreign investment, these factors continuously cause currencies to depreciate.

Exchange Rate Comparison Table: The Least Valuable Currencies in the World

Main Factors Affecting the World’s Least Valuable Currencies

High inflation, political instability, and reliance on resource exports are key reasons for low currency values in many countries. Additionally, high public debt, foreign exchange reserves shortages, and ineffective central bank interventions contribute to ongoing currency devaluation.

The Most Evident Currencies: From Lebanese Pound to Burundian Franc

1. Lebanese Pound (LBP) - The Cheapest Currency

The Lebanese Pound is ranked as the least valuable currency in the world in 2025, with an exchange rate of 89,751.22 per USD. Lebanon has experienced a prolonged economic crisis since 2019, leading to triple-digit inflation, middle-class collapse, and banking system shutdowns. The government defaulted on debt in 2020, and the currency has lost over 90% of its value on the parallel market. Although it was previously pegged to the US dollar, failed monetary policies and political instability have rendered it the world’s least valuable currency.

2. Iranian Rial (IRR) - Due to Sanctions and Inflation

The Iranian Rial has an exchange rate of 42,112.50 per USD, making it the second least valuable currency globally. The 1979 Islamic Revolution drastically changed Iran’s political and economic structure. Strict US sanctions over decades, along with nuclear program issues, Iran-Iraq war, and mismanagement, have fueled hyperinflation. Currently, Iran remains under economic pressure from geopolitical tensions and oil export dependence.

3. Vietnamese Dong (VND) - Exchange Rate of 26,040 per USD

The Vietnamese Dong has an exchange rate of 26,040 per USD. Historically, Vietnam faced high inflation and frequent economic reforms, but since the 2000s, its economy has stabilized. Despite growth, the currency continues to depreciate due to strict central bank controls. The weak currency benefits Vietnam by maintaining a trade surplus and boosting export competitiveness.

4. Laotian Kip (LAK) - 21,625.82 per USD

The Laotian Kip has been the official currency since 1952. Laos is one of the least developed economies in Southeast Asia, relying mainly on agriculture and resource exports. Limited foreign investment and industrial growth keep the currency low, especially after COVID-19, which caused inflation and economic downturn.

5. Indonesian Rupiah (IDR) - 16,275 per USD

The Indonesian Rupiah has an exchange rate of 16,275 per USD. Despite Indonesia’s large population and significant economic growth, the currency remains weak due to dependence on commodity exports. It is vulnerable to global commodity price fluctuations, and central bank interventions and limited foreign reserves add to its volatility.

6. Uzbek Sum (UZS) - 12,798.70 per USD

The Uzbek Sum has been in use since 1994 after independence from the Soviet Union. Under strict government controls and limited foreign investment, the currency remains low. The economy relies on natural resource exports and agriculture. Although economic liberalization has begun, inflation and depreciation remain challenges.

7. Guinean Franc (GNF) - 8,667.50 per USD

The Guinean Franc is weak due to Guinea’s ongoing political instability and economic crises. Weak infrastructure, limited foreign investment, and reliance on mining, agriculture, and resource exports hinder currency strength. Corruption and instability have further suppressed its value.

8. Paraguayan Guarani (PYG) - 7,996.67 per USD

The Guarani has a long history since 1945 but has faced multiple crises, including civil wars and debt issues in the 1980s. It depends heavily on agricultural exports, especially soybeans, leading to currency volatility with global commodity prices. Persistent trade deficits and high debt levels have increased demand for foreign currency.

9. Malagasy Ariary (MGA) - 4,467.50 per USD

The Ariary became the official currency of Madagascar in 2005. The country relies on agriculture, tourism, and resource exports. Weather events and political instability pose risks, with widespread poverty and limited financial tools to combat inflation.

10. Burundian Franc (BIF) - The Weakest Currency

The Burundian Franc has an exchange rate of 2,977 per USD. Burundi is among the poorest countries, with an economy dependent on subsistence farming. Chronic trade deficits, limited industrial activity, reliance on foreign aid, high inflation, food insecurity, and political unrest weaken the economy, making the Franc the least valuable currency in the world.

What Drives the World’s Least Valuable Currencies

Exchange rates are influenced by complex factors, not just one. Interest rates, inflation, public debt, political stability, and current account balances all play roles. High interest rates often attract foreign investment, increasing currency demand, but high inflation tends to weaken currencies. Countries with low inflation usually see their currencies strengthen, while high inflation erodes value.

The current account balance indicates economic health; deficits can reduce investment and weaken currencies. Economic recessions lead to lower interest rates, decreased capital inflows, and currency depreciation. Countries reliant on resource exports are especially vulnerable to exchange rate volatility.

Combining these factors explains why the currencies listed here are the least valuable in 2025. Understanding the relationship between economic fundamentals and currency values is crucial for investors and those interested in the global forex market.