DPRK cracks down on money lenders

According to the Choson Ilbo:

North Korean authorities have been rounding up money changers in major cities since Jan. 4, it emerged Friday. Sources in North Korea said an average of 20 money changers were arrested in each major city, including 17 in Pyongyang and 23 in Sinuiju since Jan. 4.

After a shock currency reform in early December, authorities banned the use of foreign currency. In the past, residents had used U.S. dollars in hotels or markets without having to change them into North Korean won.

It seems the State Security Department and the Ministry of Public Security and members of the village resident organizations secretly investigated people’s dollar holdings prior to the currency reform, the sources said.

Heads of the resident organizations from each village reportedly discovered who spent dollars, and the two security agencies investigated foreign currency managers in agencies and enterprises.

The crackdown on money changers appears to be aimed at confiscating the dollars they hold. But more broadly, the North seems determined to ferret out all newly wealthy people by gathering information about state agencies or individuals who have engaged in under-the-counter foreign currency dealings, the sources added. A North Korean businessman who was recently in China said, “The crackdown has quickly frozen the exchange market in the North.”

Rich people who were not affected as seriously by the currency reform because they hold cash in foreign currency are reportedly becoming edgy. Some are now experiencing hardship because they have not been able to change their dollars into North Korean won.

A huge private exchange market has come into existence in the North since 2000. In the early days, only small-scale dealers were engaged in the market, but once they had more than US$100,000, they even opened clandestine offices. In some cases, dealers handle nearly $1 million and work closely with state agencies in Pyongyang.

Officials who handle foreign currency whose source is hard for them to reveal reportedly rely on private money changers instead of government banks. Many money changers even in provincial regions are said to hold more than $100,000.

Read the full story here:
N.Korea Cracks Down on Money Changers
Choson Ilbo


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