Top 10 weakest currencies in the global market in 2025: Explanation of depreciation and the underlying reasons

The global economy is clearly divided, and the currencies of different countries reflect their respective statuses. In 2025, there are 10 currencies that have depreciated abnormally against the US dollar, each with its own reasons influencing its value.

Key Factors Leading to The World’s Cheapest Currencies

Currency devaluation stems from various fundamental issues, from reliance on commodity exports, political instability, to global sanctions. Some countries have experienced currency values dropping more than 90% in a short period.

Comparison Table: Numbers Tell the Story

10 Currencies Facing Exchange Rate Crisis

1. Lebanese Pound (LBP): An Example of Economic Crisis

Lebanon is experiencing one of the most severe economic crises in modern history. Since adopting the Lebanese Pound (LBP), also known as the Lira, the country has linked its currency to the US dollar since 1939.

The country is dealing with a deep recession, triple-digit inflation, and banking system collapse. In 2020, the government defaulted on debt, and in the unofficial foreign exchange market, the Lebanese Pound has lost over 90% of its value.

Key Data:

• Abbreviation: LBP
• Exchange Rate: 89,751.22 LBP per 1 USD
• Policy: Dual exchange rate system, with official peg

2. Iranian Rial (IRR): Sanctions and Domestic Policies

The Rial of Iran dates back to the 19th century when Persia was still known by that name. In 1932, the new Iranian Rial was introduced and pegged to the British Pound. But after the 1979 Islamic Revolution overthrew the Pahlavi dynasty, this currency faced new challenges.

Iran is under heavy economic sanctions from the US and international allies, leading to economic stagnation and the Rial losing its value indefinitely. Geopolitical conflicts, dependence on oil exports, and persistent inflation have all weakened this currency.

Key Data:

• Abbreviation: IRR
• Exchange Rate: 42,112.50 IRR per 1 USD
• Policy: Officially pegged to USD but allowed to float within a range

3. Vietnamese Dong (VND): Growth amid Weakening Currency

Vietnamese Dong has served the country since 1954, after Vietnam was divided into two nations. Post-Vietnam War, the Dong was reintroduced as the national currency of reunified Vietnam.

Although Vietnam has experienced notable economic growth, the Dong remains weak due to strict controls and limited exchange options. However, as a country with a trade surplus, a depreciated currency can be an advantage for competitiveness. A managed floating system is central to its monetary policy.

Key Data:

• Abbreviation: VND
• Exchange Rate: 26,040 VND per 1 USD
• Policy: Managed floating, referencing a basket of currencies

4. Lao Kip (LAK): Emerging Economy with High Risks

The Lao Kip was introduced in 1952, three years after independence from France. Originally linked to the French Franc, the Kip has experienced significant volatility, especially during the 1990s.

Laos has a limited economy in Southeast Asia, relying mainly on agriculture and natural resources. Foreign investment remains scarce, and the service sector is stagnant. Since the COVID-19 crisis, the Kip has come under increasing pressure as inflation rises and the economy contracts.

Key Data:

• Abbreviation: LAK
• Exchange Rate: 21,625.82 LAK per 1 USD
• Policy: Managed floating, pegged to Thai Baht and USD

5. Indonesian Rupiah (IDR): Emerging Market with Downward Trend

The Indonesian Rupiah was introduced shortly after independence from the Netherlands in 1945. Originally linked to the Dutch Guilder, it has faced persistent volatility throughout the 20th century, including the Asian financial crisis of 1997-1998.

Despite Indonesia being the fourth most populous country and experiencing significant growth over the past two decades, the Rupiah remains weak due to reliance on commodity exports, central bank interventions, and limited foreign reserves.

Key Data:

• Abbreviation: IDR
• Exchange Rate: 16,275 IDR per 1 USD
• Policy: Free floating system

6. Uzbek Sum (UZS): Soviet Legacy and Liberalization

Uzbekistan left the Soviet Union in 1991 and adopted the Uzbek Sum as its official currency. Since 1994, growth has improved after reforms in the mid-2010s, but the economy still depends heavily on natural resources.

The currency remains tightly controlled by the government, and lack of foreign investment has hurt its value. The scene is still undervalued due to a controlled economy and reliance on agriculture. However, the government is gradually liberalizing the economy, though depreciation and inflation remain challenges.

Key Data:

• Abbreviation: UZS
• Exchange Rate: 12,798.70 UZS per 1 USD
• Policy: Free floating system

7. Guinean Franc (GNF): Resources and Instability

The Guinean Franc has been used in Guinea since 1960, replacing the French Franc after independence. However, Guinea has weak infrastructure and low foreign investment.

The country faces ongoing political instability and economic crises. Its economy is undiversified, relying heavily on mining and agriculture. The devaluation of the Guinean Franc reflects economic and political challenges.

Key Data:

• Abbreviation: GNF
• Exchange Rate: 8,667.50 GNF per 1 USD
• Policy: Managed floating system

8. Burundian Franc (BIF): The Poorest Country

The Burundian Franc was introduced in 1964 after Burundi gained independence from Belgium, replacing the Belgian Congo Franc, with minor subsequent changes.

Burundi is one of the poorest countries in the world. Its economy is at subsistence level. It has persistent trade deficits, limited industrial activity, and relies heavily on foreign aid. Inflation, food insecurity, and political instability are main reasons for its currency devaluation.

Key Data:

• Abbreviation: BIF
• Exchange Rate: 2,977.00 BIF per 1 USD
• Policy: Monetary policy focused on controlling inflation and liquidity

What Truly Determines Currency Value

Exchange rates are not random numbers; they reflect multiple influencing factors.

Interest Rates: High rates often attract foreign investors, increasing demand and raising the currency’s value.

Inflation: Countries with low inflation tend to see their currencies strengthen, while high inflation erodes value.

Current Account Balance: A surplus indicates a healthy economy, supporting currency strength; deficits can lead to depreciation.

Economic Cycles: Recessions lead to lower interest rates, reduced capital inflows, and currency weakening.

Currencies like the Lebanese Pound and Iranian Rial are the result of these combined factors. Often, political instability, runaway inflation, and dependence on a single sector determine the fate of a currency.