Question
Download Solution PDFAmong the following which was the cheapest currency in the world at the end of 2024 ?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is Iranian Rial.
Key Points
- The Iranian Rial is considered the world's cheapest currency due to hyperinflation and severe economic sanctions.
- As of the end of 2024, 1 USD was equivalent to a significantly high number of Iranian Rials, making it the least valued currency globally.
- The devaluation of the Iranian Rial is primarily attributed to prolonged international sanctions, particularly over Iran’s nuclear program.
- In 2020, the Iranian government approved a plan to replace the Rial with a new currency called the Toman; however, the implementation has faced delays.
- The currency crisis has worsened the living standards for many Iranians, as the purchasing power of the Rial has drastically diminished.
Additional Information
- Hyperinflation
- It refers to an extremely high and typically accelerating inflation rate, which significantly diminishes the value of a country's currency.
- Hyperinflation in Iran has been fueled by economic mismanagement, international sanctions, and political instability.
- Economic Sanctions
- Economic sanctions imposed by the United States and other nations have severely restricted Iran's access to international trade and finance.
- These sanctions have targeted key sectors like oil, which is a primary source of revenue for Iran.
- Currency Devaluation
- Devaluation occurs when a country officially lowers the value of its currency relative to foreign currencies.
- In Iran's case, the Rial has been repeatedly devalued due to economic pressures and lack of foreign exchange reserves.
- Toman
- The Toman is a proposed new currency intended to replace the Iranian Rial, where 1 Toman equals 10,000 Rials.
- The move aims to simplify transactions and restore public confidence in the nation’s monetary system.
Last updated on Jul 2, 2025
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