15 Worst Performing Currencies of 2023

Usman Kabir   Mon, September 18, 2023

In this article, we discuss the 15 worst performing currencies of 2023. If you want to read about some more worst performing currencies, go directly to 5 Worst Performing Currencies of 2023.

A rise in interest rates by the Federal Reserve in the United States was expected to push the US dollar, the official currency in the country and the most popular globally, lower this year. However, robust economic data from the US, as well as a slowdown in major economies around the globe, has fueled rebound growth in the US dollar. This growth has also pressured the economics of prominent world powers, like China and Japan, who have been forced to resort to stimulus measures aimed at shoring up their local currencies.

Prominent financial stocks in the US like Mastercard Incorporated (NYSE:MA), PayPal Holdings, Inc. (NASDAQ:PYPL), and JPMorgan Chase & Co. (NYSE:JPM) have all jumped in value due to the prevailing economic conditions. Per data from the Commodity Futures Trading Commission, the net short bets on the dollar shrank to $7.17 billion in early September, from $21.28 billion in late July.

The July figure was a two-year high. Market experts, like Vassili Serebriakov, a foreign exchange and macro strategist at investment bank UBS, believe the data highlights the strength of the US economy against the rest of the world.

The strength of the US dollar can be viewed in context of the challenging economic conditions in China and loose monetary policy in other developing countries. Surging global prices for energy and food are also contributing to this strength in the dollar as other currencies go on a downward spiral.

 Japanese and Chinese authorities, as well as governments around the world, are stepping up regulations on foreign exchange markets to stop the rut. Edward Moya, a senior market analyst with OANDA and a veteran global currency strategist, believes that actions need to follow statements from fiscal chiefs.

Per Moya, the markets are not convinced of Japanese attempts to deal with currency rates and that attempts to limit the liquidity of the yuan are likely not to overcome the pressure a weakening economy has placed on the currency.

The strength of the US dollar can be measured by the US dollar index, which measures the performance of the USD against a basket of global currencies. In the past four weeks, this index is up by nearly 3%, to the highest levels seen since March. The past week has been especially kind on the index as it registered a jump of nearly 2% in a few days.

The strength of the dollar has hit currencies in developing nations. Coupled with rising inflation, inaction on parts of central banks, and trade deficit numbers, several currencies have nose-dived in value over the past few months. Government in these nations, like Turkey, Egypt, Pakistan, Lebanon, and Syria, have all been forced to look to international lenders like the International Monetary Fund and the World Bank for dollar inflows to stabilize the worsening economic conditions. Whether these bailouts are effective in the face of loose monetary policies is still up for debate.

Our Methodology

In this article, we will list the 15 worst performing currencies of 2023. The ranking is calculated by calculating the percentage decrease in value of the currencies in terms of the US dollar value. The currencies in which the percentage decrease in value in terms of the US dollar are the highest are considered the worst performing.

Data for this purpose has been taken from foreign exchange company XE. An initial data set comprising the 50 worst currencies with the highest value against the US dollar on January 2, 2023 was used. The percentage decrease was calculated by comparing this value against the worth of the currency against the US dollar on September 15, 2023. Digital coins were excluded from the list.

Pixabay/Public Domain   Worst Performing Currencies of 2023

15. Zambian Kwacha

Price Against 1 USD on January 2, 2023: 18

Price Against 1 USD on September 15, 2023: 20

Percentage Decline in Price in 2023: 11%

The Kwacha is the currency of Zambia, a country in Africa that borders Zimbabwe. The country used the British pound as the legal tender till 1964 before shifting to Kwacha. The Kwacha has taken a hit against the US dollar in recent months as private sector spending contracts, inflation hits record highs, and the central bank of the country raises interest rates to around 10% to combat rising prices. The Zambian currency is subject to uncertainty due to debt restructuring and dwindling copper production.

Top firms like Mastercard Incorporated (NYSE:MA), PayPal Holdings, Inc. (NASDAQ:PYPL), and JPMorgan Chase & Co. (NYSE:JPM) have all warned investors of the unstable economic situation in Zambia.

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