7 weakest currencies against GBP 2021 – VEF down 91%

2021 has been something of a roller coaster for several exchange rates and the economic situation of different countries. Some countries have managed to recover better than expected – while others have reached a whole new bottom level for their exchange rate. Want to know which of the weakest currencies you should probably not have the entire holiday money in right now? In this article, we dig into the 7 currencies that have lost the most against sterling in 2021.

Forex trading has a tradition of reporting at the end of each year on the weakest and strongest currencies for the past calendar year. And why break an appreciated recurring element? So a bit into the fourth quarter of 2021, it is high time to take the helicopter perspective and see which currencies qualify for the jumbo seats over those with the absolute worst development against our own Swedish krona.

Despite the fact that the world economy on the whole has been more or less up and down the last two years, the list of clinics does not contain any direct super surprises. Larger currencies with powerful economies behind them shine with their absence. As more or less expected, it is mainly smaller currencies and currencies in developing countries that were economically weak even before the pandemic that squeezed into place one to seven at the bottom. Recurring base currencies such as the Turkish lira and Venezuelan bolívar are also included.

Venezuelan bolivar fuerte: Over 91% decline

Venezuela’s currency tops the list of 2021’s weakest currencies, just like they managed to become the weakest currency of 2020. For several years now, VEF has been classified as the world’s worst currency with a value of close to zero due to astronomically high inflation. At times, the inflation has been close to 1,000,000%.

After several attempts to devalue the currency, the inflation level is now “down” to 5500%, where it is expected to remain for the remainder of 2021. Despite the tiny success with significant lower inflation, the currency is still the world’s weakest this year and down by just over 91%. The current exchange rate against the British pound is just over 600 000 VEF at 1 GBP. On October 1 this year, another devaluation was announced, then with as many as six zeros. The country’s central bank (BCV) points out, however, that the measure does not really affect the value of VEF, but rather aims to simplify money transactions. Unfortunately, it is not possible to trade VEF with any currency broker at present, but maybe that is for the best of all traders?

Sudanese pound: Just over 88% down

Sudan has struggled with a seemingly bottomless economic collapse ever since the original country was divided and the majority of the important oil sources went to South Sudan. A situation that has further worsened in 2021, partly due to the pandemic. Inflation is sky high – at present it is 365%. This can be compared with 2019, when the level was 51%. Since the division of Sudan and South Sudan, the country has been dependent on financial assistance from other countries. Central government debt amounts to several hundred percent per GDP and no currency broker wants to touch the Sudanese pound.

A year ago, 1 Sudanese pound cost 0.16 Swedish kronor – today the exchange rate is down to 0.020 SEK per SDG. In other words, the difference is real against the British pound, which is a much safer currency to trade. Try GBP trading with CFD through Capital today!

Libyan dinar: 70% decline

A Libyan dinar cost SEK 6.38 a year ago. Today, the price is down to only SEK 1.89 per 1 SOUND – which gives a total decrease of around 70%. The trend is the same against the euro. The country has rich assets in both oil and gas, which are the dominant sources of income – but both production and exports have suffered greatly as a result of the wars and conflicts of recent years. Important societal functions have been eliminated, poverty is widespread and economic development is weak. Unfortunately, there are no currency brokers offering trading with the Libyan dinar at present.

Argentine peso: Minus 29%

The Argentine peso has lost almost 29% against the British sterling so far in 2021 – and just over 70% of its value against the US dollar in just two years. What’s the main reason? As for so many other countries in economic crisis, inflation is insanely high. The consumer price index has risen by just over 50% in 2021, while growth has been negative. The country was in economic crisis even before the pandemic struck, but the situation has worsened further in both 2020 and 2021 – largely as a result of halted exports and an depleted treasury.

A year ago, an ARS cost 0,0094 GBP. Today the price is only 0,0073. While Argentina is great for holidays and very affordable right now, it is not a currency that can be traded with.

Afghani: Down 23% against GBP

Afghanistan’s currency afghani has lost almost 23% in value against the Swedish krona compared to a year ago. An unsurprising development given the events of the fall of the government and the Taliban’s takeover. Both residents and potential investors flee the country and the development in the future is judged to be extremely uncertain. The country has been promised continued support from other nations, but whether it is allowed to emerge is a completely different matter.

At present it costs 0,0080 GBP – compared to 0,011 a year ago.

Turkish lira: Down by almost 22%

Like the bolívar, the Turkish lira also had a bottom place on last year’s list. The development for 2021 has not looked much better – overall, the currency is down about 22% against the euro and the Swedish krona so far since the turn of the year. The country has long struggled with rampant inflation and an unstable political regime with many conflicts. This year’s loss in value can be traced to a number of different reasons – including President Erdogan’s latest proposal to throw out a bunch of foreign ambassadors and a shock reduction in the repo rate by as much as 2.00% to a current level of 16.00%. An interest rate situation that, on the other hand, makes TRY attractive for carry trading, even if most traders bet on further downside for TRY at the moment.

Unlike the other currencies on the list, TRY is traded by many brokers. Our favorite is undeniably Skilling (review), which has currency crosses with GBP, EUR, JPY and USD to name a few. Their interface is very user-friendly, clear and easy to use. The graphs have an incredible number of tools and setting options. Try a free demo account with Skilling today.

Ethiopian birr: -21.7%

Another African country whose currency has lost significant value in the last 12 months. Ethiopia’s birr has decreased by just over 21% against the Swedish krona compared with 1 year ago. An ETB today costs £0.015. At the same time last year, the price was £0.023 for 1 ETB. Like several other countries in the region, Ethiopia is plagued by wars and conflicts – especially in Tigray, where the situation worsened drastically in 2021. This in combination with the pandemic has hit the country’s economy hard – which before COVID-19 and the war was actually one of the biggest emerging economies in Africa. In 2021, growth has plummeted to just under 2%, from having been just over 6% in 2020. That’s equal to the largest loss in over two decades. If a US trade blockade occurs for Ethiopia, which Reuters warns of, the currency can probably become significantly weaker. Unfortunately, the Ethiopian birr is unavailable for trading, as the volume is too low and interest is very low among investors.

Is it possible to trade with these currencies?

The majority of the above currencies are not even available as instruments for CFD trading at the largest and most well-stocked forex brokers. The exception is TRY, which has long been a popular currency for carry trading due to the country’s high interest rates. The absence in the brokers’ range is best interpreted as a clear sign that there are significantly better alternatives.

You will find plenty of exciting currency pairs at market-leading players such as Skilling and CMC Markets. Become a customer of Skilling here – or test CMC Markets with a demo account.

Published: Fri, 29 Oct 2021 17:14
Author: Markus Jalmerot

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