According ot the Korea Herald:
The price of rice in North Korea has soared nearly 40-fold in the year after the country’s botched currency reform.
Rice is now traded at around 900 North Korean won per kilogram in Pyongyang’s markets, according to online media outlet Daily NK. This is up 3,990 percent from 22 won late November last year in the newly introduced currency.
The North knocked two zeros off the face value of its old currency on Nov. 30 last year, exchanging 100-won bills for new 1-won notes. Therefore the price of a kilogram of rice, which was 2,200 won in the old currency, was redenominated to 22 won.
Under the currency reform plan, a 100-won note in the new currency should have the exchangeable value of a 10,000-won bill in the old currency. However, due to 4,000 percent inflation, the new 100-won note is now only worth 250 won in the old currency.
The price of rice in North Korea is deemed the benchmark of all prices in commercial trade.
“The apparent purpose of the North Korean currency reform was to reduce the amount of money in the markets to stabilize prices, but it failed to achieve this due to an absolute lack of commodity supplies,” said Cho Myung-chul, a senior fellow at the Korea Institute for International Economic Policy.
“The fact that rice prices jumped 4,000 percent based on the currency’s exchangeable value shows that the effect of the 100-fold revaluation has mostly disappeared.”
After major markets in the reclusive state were shut down in mid-January this year, rice prices in Pyongyang soared, hitting 1,300 won per kilo in early March. They dropped to the 400-won range in May as markets began to function again, but soared over the 1,000-won mark in August due to an exchange rate hike and damage caused by heavy rains.
When the North redenominated its currency, it placed a cap on the amount of money that could be converted per person, telling people to deposit the rest in state-run banks.
The measure, which was aimed at crippling the growing merchant class and reasserting control over market activities, tightened the distribution of food and stirred anti-regime sentiment.
This Daily NK story asserts that the average salary of a general worker is around 1,500 won a month, and it is not paid regularly.
Read the full story here:
N.K. rice price soars nearly 40-fold in a year
Korea Herald
Kim So-hyun
11/20/2010
