Devalued Currencies That Define Collapsing Economies: The 2025 Ranking

When you observe the global currency market, you quickly discover that a currency’s weakness is never a coincidence. It is always the visible manifestation of much larger problems: governance failure, runaway inflation, capital flight, and economic isolation. In 2025, while the Brazilian real ends the previous year with significant declines (closed 2024 as the worst currency among the main ones, with a drop of 21.52%), there are nations where the population lives daily with monetary systems that have simply collapsed.

Recently, a conversation with a friend in Lebanon brought this reality closer. The photo he sent showed bundles of banknotes so voluminous they looked like game money – more than 50,000 Lebanese pounds, equivalent to just R$ 3.00. This image serves as a window to understand what it means to live in a country whose devalued currency not only affects investments but transforms daily life into a constant challenge.

The Mechanisms Behind Monetary Collapse

Every devalued currency tells a story of economic decisions, political crises, and institutional choices. The factors that lead a currency to the bottom are always the same, just in different intensities:

Inflation that consumes assets: While Brazil observes annual rates around 5% in 2025, some countries face scenarios where prices practically double each cycle. This hyperinflation literally devours purchasing power, making savings an illusion and wages obsolete before they are even received.

Chronic political instability: Coups, internal conflicts, constant government changes. When there is no legal security, foreign capital disappears, and the local currency turns into paper without backing.

Trade isolation and sanctions: Exclusion from the international financial system creates a currency that is practically useless for global transactions. Recently, American sanctions demonstrate how geopolitical mechanisms can completely dismantle trust in a national currency.

Scarce international reserves: Without enough dollars in reserve, the Central Bank cannot defend the currency during pressure moments. The result is a free fall without counterbalance.

Capital exodus: When even local residents prefer to store foreign currency informally instead of trusting the domestic banking system, it confirms that the situation has reached a critical point.

The Ten Most Extreme Devalued Currencies in the World

1. Lebanese Pound (LBP) – The Symbol of Collapse

Exchange rate: 1 million LBP ≈ R$ 61.00 (September 2025)

No currency in the world exemplifies total devaluation better. The official rate aims to be 1,507.5 pounds per dollar, but this quote exists only on documents. In the streets of Beirut, you need more than 90,000 pounds to get a single dollar. Banks ration withdrawals, merchants refuse the national currency, and ride-share drivers demand payment in dollars. It is a monetary system that has effectively collapsed.

2. Iranian Rial (IRR) – Sanctions and Flight to Cryptocurrencies

Approximate rate: 1 Brazilian real = 7,751.94 rials

Economic sanctions have turned the rial into a currency that is practically useless for international transactions. With R$ 100, you become a “millionaire” in rials – a reality that reveals the depth of the collapse. Interestingly, the Iranian population, especially the youth, has massively migrated to crypto assets. Bitcoin and Ethereum serve as more reliable stores of value than the sovereign currency itself. This phenomenon illustrates how citizens seek alternatives when the devalued currency ceases to function.

3. Vietnamese Dong (VND) – Historic Weakness in a Growing Economy

Approximate rate: 25,000 VND per dollar

Here, the scenario is peculiar. Vietnam has an expanding economy, but the dong remains historically weak due to monetary policy choices. ATM withdrawals produce volumes of notes that seem suspicious, but the reality is that the devalued currency reflects decades of exchange rate strategy. It is advantageous for tourists but means that imports become drastically more expensive and international purchasing power is severely limited for Vietnamese.

4. Laotian Kip (LAK) – Small and Vulnerable

Approximate rate: 21,000 LAK per dollar

Laos faces triple vulnerability: a reduced economy, critical dependence on imports, and persistent inflation. The devalued kip forces border merchants to prefer neighboring currencies like the Thai baht. The currency’s fragility reflects the structural weakness of the economy.

5. Indonesian Rupiah (IDR) – Large Economy, Weak Currency

Approximate rate: 15,500 IDR per dollar

Despite being Southeast Asia’s largest economy, the rupiah has never gained strength. Since 1998, it has consistently been among the globally devalued currencies. For Brazilian travelers, Bali offers a financial paradise – R$ 200 daily guarantees comfort and abundance.

6. Uzbek Sum (UZS) – Too Slow Reforms

Approximate rate: 12,800 UZS per dollar

Uzbekistan has implemented significant economic reforms in recent years, but the sum remains devalued, reflecting decades of economic closure. Despite efforts to attract international capital, the currency remains weak.

7. Guinean Franc (GNF) – Natural Wealth, Weak Currency

Approximate rate: 8,600 GNF per dollar

Guinea has abundant gold and bauxite, but political instability and corruption prevent this mineral wealth from translating into a strong currency. It’s the paradox of resources: material abundance does not guarantee monetary solidity.

8. Paraguayan Guarani (PYG) – Tradition of Weakness

Approximate rate: 7.42 PYG per real

Our southern neighbor maintains a relatively balanced economy, but the guarani is structurally weak. For Brazilians, this means Ciudad del Este continues to function as a favorable shopping hub.

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

Approximate rate: 4,500 MGA per dollar

Madagascar, one of the poorest nations on the planet, sees its ariary reflect this reality. Imports become prohibitively expensive, and the population has virtually no international purchasing power.

10. Burundian Franc (BIF) – The Extreme of Devaluation

Approximate rate: 550.06 BIF per real

Closing the list, the Burundian franc is so devalued that transactions above a certain amount require transporting physical volumes of notes. Chronic political instability directly materializes in the national currency.

What Devalued Currencies Reveal About the World

This ranking is not merely a financial curiosity. It functions as a mirror of the actual state of entire nations. Currency devaluation is always a symptom, never a primary disease. It reflects institutional failure, corruption, inadequate economic policy decisions, and geopolitical isolation.

For Brazilian investors and economic observers, there are practical lessons:

First: Devalued currencies are not speculative opportunities – they are warning signs. Countries that have them face deep structural crises that transcend temporary exchange rate fluctuations.

Second: Tourist destinations with devalued currencies offer real economic advantages. The purchasing power of the real or dollar is significantly amplified in these locations.

Third: Understanding devaluation mechanisms provides tools to protect assets. Diversification into assets that transcend national borders and resist inflationary erosion becomes an essential strategy.

Devalued currencies are always messengers of difficult economic realities. Tracking their trajectories offers valuable lessons on how trust, institutional stability, and good governance sustain long-term economic value.