The Venezuelan Bolivar, Zimbabwean GRTGS Dollar, Lebanese Pound, Sudanese Pound, and Syrian Pound are the top five worst performing currencies against the US Dollar.
In a recent currency watchlist by a professor of applied economics at Johns Hopkins University in Baltimore, Steve H. Hanke measured the depreciation of some currencies around the world from January 1, 2020, to September 2, 2022.
Hank who is a harsh critic of poor economic leaders says the currencies under review were “tanking” due to poor economic policies.
The five worst-performing legal tenders that top the list are also weak in their respective continents. For instance, Venezuela’s currency is the worst in South America, Sudanese and Zimbabwe’s currencies are among the weakest in Africa while Lebanese and Syria’s currencies are among the worst official currencies in Asia.
How poor are the 15 currencies against the USD?
When a country’s currency continues to weaken against the most traded currencies like the US Dollar, the currency is said to lose it value, the exchange rate is the major determinant to measure how worst or good a currency is. A lot of factors come into play.
According to Hanke’s Currency Watchlist, the official currency of Venezuela experienced -99.39% depreciation against the US Dollar between January 1, 2020, to September 2, 2022.
With –99.39%, one would most likely need a sack bag or a truck to move $100 within the county after conversion. $1 is worth 8,310,000 in the troubled South American country.
Despite the country’s abundant reserve in oil, it continues to stagger economically. As of 2016, Venezuela ranked No. 1 as the country with the most oil reserve standing at 299,953,000,000 barrels of proven oil reserves. Its oil reserve reached over 304 billion barrels as of 2021, according to Visual Capitalist.
Zimbabwean RTGS Dollar
Although, Zimbabwean RTGS Dollar shouldn’t have found itself on the list of worst-performing currencies against the USD if there had not been poor monetary and fiscal policies.
All the poor policies fight back leading to -97.33% depreciation of its currency the US Dollar. It is also among the weakest currencies on the African continent.
On the No. 3 list is the official currency in Lebanon. Hanke’s Currency Watchlist showed that the Lebanese Pound depreciated -93.35% against the USD.
34,600 LBP in the foreign exchange market would fetch the holder just $1. While $34,600 USD is worth 1.2Billion LBP.
The country’s dual currency has also failed to save the Asian country from its present economic calamity, experts say, due to financial mismanagement and corruption.
In the fourth and fifth position are the Sudanese Pound and Syrian Pound with -84.84% and -79.62% depreciation against the USD respectively within 32 months. The Syrian Pound is among the weakest among Asian currencies.
|Rank||Currencies||Exchange Rate||Depreciation since Jan. 1, 2020|
|1||Venezuelan Bolivar||8,310,000 VES/USD||-99.39%|
|2||Zimbabwean RTGS Dollar||850 RTGS/USD||-97.33%|
|3||Lebanese Pound||34,600 LBP/USD||-93.35%|
|4||Sudanese Pound||574 SDG/USD||-84.84%|
|5||Syrian Pound||4,475 SYP/USD||-79.62%|
|6||Argentine Peso||285 ARS/USD||-72.98%|
|7||Turkish Lira||18.22 TRY/USD||-67.34%|
|8||Iranian Rial||299,000 IRR/USD||-55.45%|
|9||Sri Lankan Rupee||379.38 LKR/USD||-52.08%|
|10||South Sudanese Pound||651.01 SSP/USD||-51.61%|
|11||Nigerian Naira||710 NGN/USD||-48.87%|
|12||Laotian Kip||15,582.99 LAK/USD||-43.00%|
|13||Ghanaian Cedi||9.94 GHS/USD||-42.57%|
|14||Ukrainian Hryvnia||40.77 UAH/USD||-41.69%|
|15||Malawian Kwacha||1,300 MWK/USD||-39.54%|
|16||Sierra Leonean Leone||14,267.86 SLL/USD||-31.77%|
|17||Pakistani Rupee||218.67 PKR/USD||-29.19%|
|18||Colombian Peso||4,472.77 COP/USD||-26.58%|
|19||Brazilian Real||5.17 BRL/USD||-22.24%|
Africa’s biggest economy worst against US Dollar
Whenever it isn’t the largest economy by Gross Domestic Product (GDP), it would be among the top three biggest economies in Africa, unfortunately, Nigeria’s Naira is the 11th worst performing currency against the US Dollar.
There are also more than 20 currencies in Africa that are more valuable than the Naira though the country prides itself as the giant of Africa.
As of September 2, 2022, Naira had experienced -48.87% depreciation against the USD at NGN710/USD, (using the black market rate) though the apex bank chief said the parallel market exchange rate is illegal, the official rate is not accessible either.
At the time of compiling this list, $1 is exchanged at NGN716 at the black market rate that is most accessible to Nigerians who need FX to meet their needs.
Nigeria has three government-owned refineries but can’t refine what millions of oil its citizens consume on daily basis, rather it export and buy (or trade) to meet local demands.
Even though Nigeria’s refineries are not functioning, the government allocates billions of naira for its yearly maintenance and payment of workers at the redundant oil firms.
The Naira, Nigeria’s currency ranks 11th worst-performing currency against the US dollar, according to Hanke’s Currency Watchlist.
Severally, experts within and outside the country had advised the federal government to have a unified exchange rate to attract foreign direct investment, reduce inflation, and improve the business-enabling environment.
The recommendations if appropriately implemented in the long-run lead to the appreciation of the Naira against its peers in the FX market.
These worst performing currencies against the US dollar by Prof. Steve Hanke is part of economic realities in the affected countries and why they should stop boasting about GDP.
- Steve Hanke (September 5, 2022). “Hanke’s Currency Watchlist”. twitter.com
- Anshool Deshmukh (June 7, 2021). “Which Countries Have the World’s Largest Proven Oil Reserves?”. visualcapitalist.com