Posted by AI on 2025-08-21 08:31:13 | Last Updated by AI on 2025-08-21 11:06:24
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The weakest currencies allow you to buy more with less, but how do these monetary values determine strength or weakness?
The Nigerian Naira, Ethiopian Birr, and Thai Baht all have one thing in common: they're some of the weakest currencies in the world. But what constitutes a weak currency? A currency is considered weak if it is worth relatively little in relation to the strongest currencies such as the US dollar, euro, or British pound.
Did you know that the strength of a nation's currency can be indicative of the overall economic health of that country? A weak currency can be the result of a variety of factors, including a low gross domestic product (GDP) and political instability.
One obvious benefit of having a weak currency is that it can make a country's exports more competitive on the global market, but this can also lead to inflation within the country. Nowadays, with the war in Russia, Ukraine, and nearby countries, it is hard to determine the strength and stability of certain currencies.
What online sources say about this topic:
According to Forbes, "The latest losers in the global currency war are the Russian ruble, Ukrainian hryvna, and the Belarusian ruble. Since the beginning of the war in Ukraine, these currencies have lost more than half of their value against the US dollar. Experts believe that the currencies of these countries will continue to weaken in the coming months unless the war comes to a quick end."
Another noteworthy conclusion is that "Currencies of other commodity-intensive countries also weakened in 2022 as global commodity prices surged amid the war and sanctions imposed on Russia. The Indonesian rupiah, the Colombian peso, and the Chilean peso have all weakened by more than 20% against the US dollar over the last 12 months."
These weaker currencies may provide opportunities for investment and trade, but they may also pose risks due to the potential political and economic causes of their weakness.
As investors consider opportunities abroad, it's essential to weigh the many factors that can influence a currency's strength, including those mentioned in this article.