Price inflation in North Korea’s markets has shifted into overdrive, with the price of rice in Hyesan reaching an unprecedented 7000 North Korean Won/kg. One key reason for the rise is that the unofficial Chinese Remnimbi (RMB) exchange rate is also rising fast: this morning it was 1100won, representing the first time that it is known to have surpassed 1000won.
A source from inside Hyesan told Daily NK today, “On the morning of the 27th, one RMB was worth 860won, but by mid-afternoon it had gained 150won to end up at 1010won. The same thing happened on the 28th.”
Rice usually follows in the wake of a rising RMB, and the current situation is no different. As of the 28th, the price of decent rice had reached 6,000won in Musan and 6,500won in Onsung, alongside the 7,000won recorded in Hyesan. This is twice the price recorded in mid June, when rice could be bought for little more than 3,000won. Rice is not alone; in North Korea, few if any products are able to escape the influence of the RMB exchange rate.
Though causes of price instability in North Korea are never certain, one suggested cause of the current rises is the impending implementation of new economic management measures.
One aspect of these measures, known as the ‘June 28th Policy’, involves increasing rates of pay for certain types of employee by a factor of four to five times, something that has the potential to incite exchange rates and bring high levels of inflation even before it is implemented.
Certainly, the June 28th Policy is on everyone’s mind. “Since the 20th, city and county Party secretaries and administrative and economic officials have been having meetings, and it appears that they going to make public information on wages, production costs etc.,” the source concluded.