Markets in regions of North Korea are seeing rapidly
increasing levels of foreign currency usage for small trades as well as large,
indicating the further erosion of faith in local Korean People’s Won (KPW).
A source in North Hamkyung
Province told Daily NK on the 17th, “Nowadays
people are getting their change in foreign currency when they pay with a $100
or 100 Yuan bill. There are 10 Yuan bills around, and even 5 Yuan and 1 Yuan
bills are circulating freely.”
According to the source, as
recently as last year the only hard currency units that were relatively freely
available in North Korea were $100 and $50 in US Dollars, and 100, 50, and 20
in Chinese Renminbi,otherwise
known as Yuan. Sellers tended to provide change in local currency
units or in kind.
The source went on, “So now traders don’t have as much hassle trying
to calculate exchange rates and amounts of change in Chosun money. Volumes of
foreign currency are increasing now that there are more Chinese tourists about
and the number of us going to China to work is also rising.”
It is also now the case that
many services are being traded entirely in hard currency, too.
A source from South Pyongan
Province gave an example to Daily NK, saying, “In Pyongyang the price of private English tutoring for
people’s kids is given as $10 a month for two hours a week, and
for three hours a week its $15.”
In early March in Pyongyang,
$1 was trading for KPW7300 and 1 Yuan was worth KPW1100. This compares
favorably with the period around the anniversary of Kim Jong Il’s birth last month (February 16th), when $1 dollar was
worth KPW8400 and 1 Yuan cost KPW1200.
Analyzing this, the source
said, “Holding foreign currency is stable, and it’s light so it’s easy to store. When you go
out to shop with foreign currency it’s more comfortable in many
ways.” He then speculated, “The more people use it, the more the
value will go out of Chosun money.”
Asked about formal
restrictions on foreign currency usage by the North Korean authorities, the
source pointed out that rhetoric is not the same as action. “They hand down the occasional order to not use foreign
currency,” he noted, “but they’re not actually cracking down on it in markets.”
