While the expense of travelling to different countries might sound daunting, there are numerous budget-friendly destinations with the cheapest currencies waiting to be explored, often overlooked by eager travel enthusiasts.
Depending on where you live across the globe, the U.S. dollar is among the most popular and strongest currencies in the world. But can you imagine the lowest of currencies, where you could purchase a full-course meal for just one penny?
Below, in the shortlist, we have curated the countries with the cheapest currencies across the world. Explore them, where vacationing won’t be a money matter!
How is overseas currency priced?
While the overseas currency is always compared to another currency, it’s like they are inversely proportional. When one goes up, the other goes down.
For instance, if you are exchanging the US dollar for a Vietnamese dong or Iraqi “dinar,” you need to check how many dollars you have to exchange for a certain amount of another currency. This is called the exchange rate.
While a few currencies, like the US Dollar and Indian Rupees (INR), can change in value depending on their value and demand, they are prominently known as floating currencies. On the contrary, “pegged” currency values remain constant and at an agreed rate.
If the exchange rate shifts, it directly affects the bought and sold prices using a different currency. For example, a vacation in India would cost more in rupiah if the Indonesian rupiah declined versus the rupee.
The Cheapest Currencies in the World in 2024
1. Iranian Rial
- Currency Code – IRR
- 1 USD = 42,105 rials (as of Feb 2024)
- 1 Euro= 45,348 rials
The Iranian currency ranks first on the list of the cheapest currencies in the world. Owing to the 1979 Islamic Revolution, numerous businesses abandoned Iran due to political instability. Not only that, but several Iranian nuclear actions and the Iran-Iraq war led to economic sanctions. In addition, the Iranian government imposed restrictions on citizens relocating to several countries, resulting in a substantial black currency market.
2. Vietnamese Dong
- Currency code- VND
- 1 USD = 24,535 Vietnamese Dong
- 1 Euro = 26, 422 Vietnamese Dong
Following a centralised economy, the country, Vietnam, is walking on the path of a centralised economy; however, according to an expert, the country has a long way to go. Although the Vietnamese currency, the dong, is highly devalued, it has a higher chance of improving shortly.
3. Sierra Leonean Leone
- Currency Code-SLL
- 1 USD= 19,750 Sierra Leonean Leone (As of Feb 2024)
- 1 Euro= = 21, 268 Sierra Leonean Leone
An African currency, the Sierra Leonean Leone, is highly affected owing to poverty. Due to a civil war in the Western African Region, Africa has a recorded history of financial scandals, corruption, and conflicts that eventually led to the harsh downfall of the country’s economy and its currency. Meanwhile, the Ebola virus equally contributed to the decline of its economy.
4. Lao or Laotian Kip
- Currency Code= LAK
- 1 USD = 20,876 Laotian Kip (As of Feb 2024)
- 1 Euro= = 22, 483 Laotian Kip
Named among the least valuable currencies, the Laotian Kip is not a devalued currency but has had a low currency rate since its introduction in 1952. With improvement in the years to come, LAK would hold an enormous position. Additionally, a connecting train from Beijing to Laos is planned to be introduced, which might draw investors to this small country. Although Laos is the country with the lowest currency in the world, with ongoing improvement, the country will lead over the years.
5. Indonesian Rupiah
- Currency Code – IDR
- 1 USD = 15, 666 Indonesian Rupiah (As of Feb 2024)
- 1 Euro = 16,877 Indonesian Rupiah
Accordingly, the condition of the country’s economy has not improved in years. Owing to the decline in foreign exchange reserves, the country’s economy and its currency have witnessed a devolution. On the other hand, Indonesia is dependent on the export market, and hence, the fall in the cost of commodities has devalued the currency more.
6. Uzbekistan Som
- Currency Code: UZS
- 1 USD = 12, 358 Uzbekistani Som (As of Feb 2024)
- 1 Euro = 13, 314 Uzbekistani Som
Despite Uzbekistan’s government’s several efforts to improve the country’s economy, none of them worked. Meanwhile, owing to declining foreign exchange reserves, the currency is facing a major devaluation. Recently, Uzbekistan implemented a reformatory measure; however, the changes in currency due to this measure are yet to be explored.
Besides, the secondary factor was COVID, which led to a major devaluation of Uzbekistan’s currency, “Som.”
7. Guinean Franc
- Currency Code – GNF
- 1 USD = 8605 Guinean Franc (As of Feb 2024)
- 1 eURO = 9268 Guinean Franc
Another African currency among the least valuable currencies, the Guinean Franc, devalued owing to several factors, including a high inflation rate, progressing poverty, and prospering gangsters.
Although poverty has led to the downfall of GNF, the country’s natural gifts like gold, diamonds, and aluminium should emerge as the greatest factor in revaluing its currency.
8. Paraguayan Guarani
- Currency Code: PYG
- 1 USD = 7,302 Paraguayan Guarani (As of Feb 2024)
- 1 Euro= 7,867 Paraguayan Guarani
Ranked as the second poorest South American country, Paraguay has ranked among the 10 most cheap currencies in the world. Meanwhile, owing to high inflation, a high unemployment rate, an increase in poverty and corruption, its currency devaluation, and the country’s economy, it continues to suffer a downfall.
9. Ugandan Shilling
- Currency Code: USH
- 1 USD = 3,881 Ugandan Shilling (As of Feb 2024)
- 1 Euro = 4,189 Ugandan Shilling
Owing to several setbacks under Idi Amin’s governance, this Ugandan currency became the victim of devaluation while constantly ranking itself among the world’s cheapest currencies. Meanwhile, the country’s several policies, including its immigration policy, were the factors that contributed to the country’s economic adversity.
Nevertheless, the overall improvement of Uganda’s economy has seen a surge, but not more than 5 per cent of the total devaluation.
10. Colombian Peso
- Currency code: COP
- 1 USD = 3,915 COP (As of Feb 2024)
- 1 Euro = 4,289 COP
As the national currency of the Republic of Colombia, soon after inflation, it ranked among the weakest and least valuable currencies of the globe. Initially introduced in 1810, the Colombian peso has been pegged to the French franc, the British pound sterling, and the US dollar.
However, the devaluation started in the 1980s, when 1 USD equalled 50 pesos. As of 2024, it has surged almost 3000 times.
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Why do currencies devalue?
Recession
During the recession period, that affects the overall country’s economic growth, which also includes the foreign exchange market. Recession leads interest rates to fall further, leading foreign capital to devalue.
Inflation
Inflation affects the country’s overall economic growth and you will see a surge in goods, taxes, and services when the inflation is low. While inflation rates see a sudden decrease, they further increases the currency value and vice versa.
Interest Rates
The higher the interest rates, the lower the country’s currency value. Hence, it is one of the important factors that affect the exchange rate
Government Debt
Government debt is a public liability, and if the government is facing debt, it has a higher chance of facing inflation. If a country is facing debt, investors might have second thoughts considering the higher inflation rate, which further depreciates the currency value.
Political Instability
The lack of stability in the government might harm the country’s economic performance, as investors will not profit from it.
Final Word
Although it is difficult to rank the 10 cheapest currencies owing to the rapidly changing economic conditions of the countries, we have curated the list according to the latest details available. While several economic setbacks are the major reasons for the country’s lowest currencies, the inflation rate and recession are the major reasons.
Besides the economic recession, if you are a traveller, these locations can be perfect if you’re priced out of travelling in a fabulous yet exorbitantly expensive locale. So, if you’re seeking an extraordinary experience without extravagant price tags, check out the above-mentioned countries with the cheapest currencies to travel.
