In the past year, several currencies around the world have faced significant devaluation against the US dollar. While the rankings have shifted slightly, many countries, particularly in the Arab region, continue to struggle with economic instability. Zimbabwe's "ZimDollar," backed by gold, topped the list with a staggering 954.2% decline. The Lebanese pound also saw one of its worst years, losing about 500% of its value. Other notable mentions include Iran, Vietnam, Sierra Leone, Laos, Indonesia, Syria, Uzbekistan, Guinea, and Paraguay, each facing unique challenges that contributed to their currency's weakening.
The Plight of Weakening Currencies
In the tumultuous financial landscape of the past year, certain nations have witnessed their currencies plummeting in value relative to the US dollar. Among these, Zimbabwe stands out for its gold-backed "ZimDollar," which experienced an unprecedented 954.2% drop. This dramatic decline underscores the country's ongoing economic struggles.
In the Middle East, Lebanon has endured one of its most challenging years. The Lebanese pound lost approximately 500% of its value, reaching 89,560 pounds per dollar on the parallel market. This severe devaluation aligns with the International Monetary Fund (IMF)’s efforts to address Lebanon’s banking and economic crises through policy reforms implemented by the Ministry of Finance and the Central Bank. These measures, including tighter fiscal policies and unifying exchange rates, have helped stabilize the pound and curb inflation.
The Iranian rial, once the weakest currency globally, now ranks third. The marginal weakening of 0.21% reflects the enduring impact of US sanctions following the collapse of the 2015 nuclear deal. Regional tensions further complicate the situation, posing additional risks to the currency.
The Vietnamese dong weakened by 4.46%, partly due to restrictions on foreign exports and a decline in export volume. In response, Vietnam’s central bank adjusted the currency to enhance export competitiveness.
Sierra Leone’s Leone, ranked fifth, faces high debt levels, inflation, slow economic growth, and lingering effects from health crises like Ebola. It depreciated 1.43% against the dollar in 2024.
The Lao kip, placed sixth, grapples with high inflation, slow economic growth, and mounting external debt, leading to a 6.44% depreciation.
Indonesia’s rupiah, vulnerable to global inflation due to its dependence on imported goods, weakened by 4.86%. This has exacerbated the country’s trade deficit.
Syria’s pound, despite slight improvements after the fall of Bashar al-Assad’s regime, remains among the weakest currencies, trading at 13,000 pounds per dollar. The prolonged conflict has devastated the economy.
Uzbekistan’s som, ranked ninth, continues to face challenges such as unemployment, inflation, and corruption, resulting in a 4.59% weakening.
Guinea’s franc, placed tenth, has struggled since the political conflicts of the 1990s, though recent signs of recovery are emerging. It depreciated 1.61% against the dollar.
Paraguay’s guarani, ranked eleventh, suffers from ongoing inflation, unemployment, corruption, and counterfeit money circulation, leading to a 7.55% depreciation.
From a journalist's perspective, this year’s currency fluctuations highlight the interconnectedness of global economies. The devaluation of these currencies serves as a stark reminder of the vulnerabilities faced by developing nations. It underscores the need for robust economic policies and international cooperation to mitigate the adverse effects of financial instability. As we move forward, it is crucial to focus on sustainable development and resilient economic strategies to ensure long-term stability and growth.