Experts classify currencies around the world as strong or weak, depending on many factors.
What makes a currency weak?
Three main factors influence the strength of a currency. These are interest rates, economic policies, and stability.
Currencies with relatively high-interest rates attract foreign investors, which increases demand and price. The reverse contributes to a weaker currency.
Economic policies that keep inflation and debt under control influence the currency. Higher inflation and public debt can be bad for a country’s currency. Countries that are not stable often have weak currencies.
The American dollar
The US dollar is a currency used in almost every country in the world. A supranational or global currency is a currency that is the object of international transactions without fixed borders.
The US dollar and the euro are the most widely used currencies in terms of world reserves.
This list will use the dollar exchange rate as the standard unit of value.
Here are the seven weakest currencies in Africa
1. Sierra Leonean Leone (SLL)
According to Lowest Currencies.com, one US dollar equals 9,797.40 Leone. Although Sierra Leone is rich in enormous mineral resources, the country’s economy is doing poorly.
2. Guinean Franc (GNF)
Guinea takes second place on the list. One dollar is equivalent to more than one million Guinean Francs. Like Sierra Leone, the nation is also blessed with natural resources and fertile soil, with a favorable climate for agriculture.
3. Malagasy Ariary (MGA)
This is the currency used by Madagascar. One dollar is equivalent to 3879.17 Malagasy Ariary.
4. Ugandan Shilling (UGX)
One US dollar is equivalent to 3,729.02 Ugandan Shilling. The country is currently struggling to rebuild itself after two decades of insurgency.
5. Tanzanian Shilling (TZS).
Although Tanzania enjoys relative economic stability, many of its citizens still live below the poverty line. One dollar is worth 2318.03 Tanzanian Shilling.
6. Burundian Franc (BIF)
The long wars between Hutus and Tutsis have caused historic anarchy in Burundi for years. This landlocked country is grappling with severe economic problems. One dollar is worth 1926.56 BIF.
7. Congolese Franc (CDF)
Like many African countries, the Democratic Republic of the Congo is endowed with natural resources. It didn’t help its economy, however. One dollar is worth 1,897.36 CDF.
Photo credit: facetofaceAfrica