The Phenomenon of Depreciated Currencies: Understand Why Some Countries Face Severe Currency Crises

The global economy in 2025 presents a disturbing scenario for many nations: while Brazil ended 2024 with a devaluation of 21.52% against the dollar, there are countries where the situation is infinitely more severe. There are economies where the population lives daily with the cheapest money in the world, so much so that seeing packages containing tens of thousands of units in one person’s hands gives the impression of dealing with a game board currency.

The natural question that arises is: what really causes a currency to lose so much purchasing power? The answer is neither simple nor singular. It is always a confluence of elements that erode market confidence.

The Pillars of Monetary Devaluation

Runaway inflation beyond control

When prices rise uncontrollably month after month, eroding wages and savings, we are facing hyperinflation. In contrast, Brazil remains around 5% per year in 2025, a scenario that already worries authorities. However, some countries face realities where inflation erodes purchasing power in a matter of weeks.

Institutional collapse and political insecurity

Coup d’états, internal wars, and ephemeral governments eliminate any prospects of legal stability. When investors lose confidence in institutions, they simply abandon the local currency as a store of value. The predictable result is: the currency becomes practically useless for international transactions.

International economic isolation

Economic sanctions restrict access to the global financial system, preventing legitimate commercial transactions. The cheapest money in the world often reflects this reality of isolation imposed by geopolitical tensions.

Insufficient foreign exchange reserves

When the Central Bank does not have adequate dollars to support the currency, decline is inevitable. It’s like a person with a low account balance, unable to honor commitments.

Chronic capital exodus

When citizens themselves prefer to store strong currencies informally instead of the local currency, it signals destroyed confidence. The population recognizes that the national asset does not preserve value.

Ranking of the 10 Currencies with the Lowest Purchasing Power in 2025

1. Lebanese Pound (LBP) - The Complete Collapse

With an official rate of 1,507.5 pounds per dollar, the real parallel market rate exceeds 90,000 pounds per dollar. The enormous divergence between the official and the reality reveals a economically dead currency. Banks drastically limit withdrawals, merchants refuse local money, and even ride-share drivers demand payment in dollars. The scenario depicts a population that has simply lost confidence in the national currency.

2. Iranian Rial (IRR) - Impact of Economic Sanctions

International sanctions have turned the rial into a virtually worthless currency. With R$ 100, a Brazilian becomes “millionaire” in rials. The government tries to regulate the exchange rate through artificial controls, but multiple parallel rates persist. The young population, in particular, has migrated to decentralized assets like Bitcoin and Ethereum, seeking to preserve capital in a currency that offers no security.

3. Vietnamese Dong (VND) - Structural Weakness

Approximately 25,000 dongs equal 1 dollar. Unlike collapsing economies, Vietnam has robust economic growth, but its monetary policy has historically kept the dong weak. Tourists enjoy: with 50 dollars, they live like millionaires for days. For the local population, however, imports become more expensive and international economic integration is hindered.

4. Laotian Kip (LAK) - External Dependence

About 21,000 kips per dollar. Laos faces a limited economy, dependence on imports, and ongoing inflationary pressure. At the border with Thailand, merchants prefer to receive Thai baht, indicating rejection of the local currency even in small transactions.

5. Indonesian Rupiah (IDR) - Economic Giant with a Weakened Currency

Approximately 15,500 rupiahs per dollar. Despite being Southeast Asia’s largest economy, the rupiah has historically remained weak since 1998. Vietnam offers significant advantages for visitors: R$ 200 daily allows a luxurious lifestyle in destinations like Bali.

6. Uzbek Som (UZS) - Legacy of a Closed Economy

About 12,800 soms per dollar. Uzbekistan implemented economic reforms in recent years, but decades of trade isolation have left deep marks. The currency remains weak despite government efforts to attract foreign investment.

7. Guinean Franc (GNF) - Resource Paradox

Approximately 8,600 francs per dollar. Guinea has abundant gold and bauxite, but chronic political instability and corruption prevent this mineral wealth from converting into a robust currency. It’s the classic case of a resource-rich country with poor governance.

8. Paraguayan Guarani (PYG) - Neighbor with a Weak Currency

About 7.42 guaranis per real. Paraguay maintains a relatively stable economy, but its guarani remains traditionally depreciated. For Brazilians, this perpetuates Ciudad del Este as a preferred destination for advantageous international shopping.

9. Malagasy Ariary (MGA) - Poverty Reflected in Currency

Approximately 4,500 ariarys per dollar. Madagascar, one of the poorest nations globally, sees its money as the cheapest in the world reflecting this reality. Imports become inaccessible and the population’s international purchasing power is virtually zero.

10. Burundian Franc (BIF) - Money Bags Without Value

About 550 francs per real. Burundi faces chronic political instability that directly manifests in the national currency. Larger transactions force people to literally carry bags containing enormous amounts of banknotes.

What the Ranking Reveals About Economy and Investment

This international scenario offers relevant practical lessons. First, fragile economies pose immense risks despite superficially seeming like opportunities. Second, destinations with depreciated currencies offer real advantages for tourism and consumption when financed with strong currencies. Third, monitoring these dynamics reveals how inflation, corruption, and instability affect ordinary citizens.

The fundamental lesson remains clear: confidence, institutional stability, and good governance are the foundations of any strong currency. The cheapest money in the world is always a symptom of deep structural problems. For the Brazilian investor, recognizing these patterns provides valuable perspective on how to structure resilient wealth, seeking assets that cross borders and are not subject to the vulnerabilities of specific local economies.

Understanding these global dynamics turns into continuous learning, essential for anyone who wants to protect and grow their capital in an economically heterogeneous world.