Explanation

The smallest country in the world is Vatican City

Vatican City, a city-state surrounded by Rome, Italy

Vatican City is the headquarters of the Roman Catholic Church

The Currency of Vatican City: Euro

The Continent of Vatican City: Europe

The Official languages of Vatican City: Italian, Latin

The Government of Vatican City: Theocracy, Absolute monarchy, Elective monarchy

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while 

The smallest Muslim country is Brunei

Nauru is the smallest republic in the world

Maldives is the smallest in SAARC

Largest Muslim county Indonesia