What is the cheapest currency in the world and why did it happen

What is the cheapest currency in the world and why did it happen

Categories: Asia | Economy | History

Many people dream of having a lot of money. But not always a large number of banknotes in the hands or a round amount in the account means wealth. There are currencies that are absolutely not valued and are hardly worth the paper on which they are printed. We will tell you which money is the most devalued in the world and why this happened.

What is the cheapest currency in the world and why did it happen

It should be said right away that the rating of the cheapest currencies often changes the leader. It all depends on the economic and political situation in a particular country. Financial crises, wars, coups and even just political scandals can bring down the currency in a matter of days.

What is the cheapest currency in the world and why did it happen

As of 2022, the doubtful first place in the list of the most devalued money is occupied by the Iranian rial. In mid-October, you can buy as much as 42 thousand rials for one US dollar! It turns out that the rial is 664 times cheaper than the Russian ruble. How could this happen in a country where there is industry, oil and gas fields, access to the sea and even its own space program?

The devaluation of the Iranian rial began back in 1979. Then the Islamic revolution took place in the country and the once progressive secular state turned into a country where imams and mullahs rule. Many foreign companies have left Iran due to uncertainty and chaos. Soon local entrepreneurs, accustomed to the free conduct of business, began to withdraw their capital abroad.

Further — more. In 1980, the Iran-Iraq war broke out, which lasted with varying success for 8 years. Then the authorities of the Islamic Republic of Iran announced that they were launching their own nuclear program and planned to acquire nuclear weapons. This led to the imposition of sanctions on an already weakened country. The measures taken by the international community did not bring the Iranian authorities to reason and the "sanctions nuts" were tightened tighter and tighter.

What is the cheapest currency in the world and why did it happen

Its leaders also contributed to the impoverishment of the country. The country has introduced restrictions on the turnover of foreign currencies among citizens. This immediately gave a tangible economic effect, albeit a negative one. The black market of foreign exchange transactions has grown by 400 percent and shady businessmen have begun to earn money on it. Of course, there were no receipts from these operations to the treasury of the country.

In 2015, things got so bad that Iran agreed to freeze its nuclear program. In exchange, the United States, France, Great Britain, China, Russia and Germany had to lift some of the sanctions. The agreement was solemnly signed, but Tehran adhered to it for only three years. Already in 2018, the country, as if nothing had happened, continued to work on weapons of mass destruction. Of course, the sanctions were returned, and in addition, fresh ones were thrown on top, touching on oil and gas exports.

The blow to the economy was very strong. Oil and gas brought Iran 69 percent of all revenues, and new sanctions closed the world hydrocarbon market for the country. The restrictions also affected metallurgy, chemical industry, instrument making.

What is the cheapest currency in the world and why did it happen

In 2020, the Iranian rial finally "crumbled". Inflation took an avalanche form and amounted to 600 percent by the end of the year. To visit the store, Iranians had to put money in bags. Therefore, the government of the country decided to introduce a new monetary unit — fog. With its help, it will be possible to remove four zeros from the banknotes.

The transition to new money is creaking, and experts are skeptical about the success of the enterprise. There is a very high probability that the mists will turn into dust as quickly as the rials. It's not about the name or the number of zeros on paper.

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