Recently, the yuan was trading as high as KRW 1,500 in Hyesan, amid rumors that the city’s customs house will reopen in mid-June, a source in Yanggang Province told Daily NK on Friday.
“The KPW-RMB has been skyrocketing in Hyesan recently. As recently as late last month, the yuan was trading at KPW 1,250 [as of May 29], but now, it’s trading at KPW 1,420,” he said, speaking on condition of anonymity for security reasons.
According to the source, rumors have recently been circulating in Hyesan that the customs house in the city “will reopen from the middle of this month.” Because of this, traders are buying yuan in preparation for the restart of trade.
He said that demand for the yuan began climbing suddenly from June 4, leading to a rise in the RMB-KPW exchange rate, which blew past the KPW 1,500 line for a short time on June 7.
In short, there is a lot of demand for yuan, but only a limited amount of the currency is circulating. This has allowed buyers to drive up the exchange rate.
Won-yuan rates spike in Hoeryong, too
The situation is similar in Hoeryong, North Hamgyong Province. The yuan had been trading from KPW 1,200 to 1,300, but rates suddenly began climbing from June 4, hitting KPW 1,480 on June 6.
A Daily NK source in the province said that “more people want to buy yuan than sell it nowadays, which has led to a climbing RMB-KPW exchange rate.”
That being said, most money changers are holding on to their yuan to drive up the price, which means few actual money exchanges have taken place.
In fact, many people are speculating that the RMB-KPW exchange rate will climb past KPW 2,000 if the customs house reopens, which suggests that foreign currency transactions may contract for the time being.
“They say the yuan is currently trading at KPW 1,420 in Hyesan, but few people will actually sell off what they have,” the source in the city said. “People who purchased their yuan at the current high price are anxiously watching to see if the customs house reopens.”
Translated by David Black. Edited by Robert Lauler.
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