North Korean Currency Sovereignty Diminishing

Daily NK
Lee Sung Jin

As the circulation of the Chinese Yuan in the North Korean markets increases, it is suggested that the value of the North Korean won will continue to fall.

A source from North Korea said in a phone conversation with the Daily NK on the 29th, “In the jangmadang nowadays, there is nothing one cannot buy with Chinese currency. There is no longer even the need to convert into our own money (the North Korean won).”

The source added, “In Chosun (North Korea) nowadays, one can buy a kilogram of rice anywhere for 5 Yuan. Merchants, in particular, like the Chinese currency.”

According to the source, direct transactions in the PRC’s currency began in the fall of last year. In a significant part of the border regions (in North Hamkyung, Yangkang, Jagang Provinces, and Shinuiju) 50 and 100 Yuan notes began to circulate, usually in residential deals and in the sales of furniture and electronic goods.

However, since the first half of this year, with the rapid rise in general food prices in the country, the source elaborated that 5, 10, and 20 Yuan notes began to appear in the purchase of daily necessities in public markets.

According to the Daily NK’s research, the exchange rate for one Yuan in North Korea at the end of June was 435 won in Pyongyang, 440 won in Wonsan, 435 won in Shinuiju, 430 won in Hamheung, 450 won in Hoiryeong, and 445 won in Chongjin. When compared to the Daily NK’s research last December, it can be seen that the value of the North Korean won has declined 5 to 20 won in each region.

The source added, “In Hoiryeong, and other border cities, the price of a kilogram of rice being equivalent to 5 Yuan is engrained in the people’s minds.”

He explained, “Among ordinary citizens, the fact that a yardstick for the price of food is changing to the Yuan symbolizes “disobedience” towards our (North Korean) currency. With the devaluing of the North Korean currency, people are flocking to the dollar or to the Yuan.”

Additionally, the source noted, “Average citizens do not know the market exchange rate of the Yuan, which is constantly changing, so the merchants believe that they can gain from dealing in the Yuan.”

He explained, “Until now, only money changers in the border region had Chinese money and in major cities of the southern provinces, the merchants usually dealt in the dollar or in the euro. However, nowadays, with those in the southern regions trading frequently with China, the Yuan is often exchanged for the dollar in the border area.”

One source in Yangkang Province said in a phone conversation with the Daily NK on the 28th, “Smugglers have also played a big role in the growth of Yuan exchange. These days, people in their 20s carry several tens of Yuan to gain acceptance.”

The source explained, “It is a trend among the wives of officials to deal in the Yuan in the jangmadang even when they have North Korean currency. Using Chinese money is seen as a symbol of a person’s wealth and power.”

He added, “People in the border region try not to carry around North Korean money if they can. Even until just a few years ago, only the rich had access to the Yuan, but these days everyone is trying to get a hold of the Chinese currency.”

Finally, the source predicted, “As long as the state fails to resume normal food distribution and the state-operated stores do not sell products, the Yuan will soon take over as the standard currency for all transactions.”


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