North Korea’s state media has asserted that the global trade sector is rejecting the US dollar, while the use of each country’s national currency is becoming more common. The regime appears to be encouraging greater use of the North Korean won by traders as the country faces difficulties in securing foreign currency due to international sanctions.
In an article entitled “Why is the world moving away from the dollar?” Korean Workers’ Party’s mouthpiece Rodong Sinmun said on August 2 that “quite a few countries in Asia, Africa, Europe and South America are rejecting the dollar and heading towards the direction of using their own currency. It’s a trend to reject the dollar and use one’s own currency these days.”
Rodong Sinmun’s “State of Affairs” section provides straightforward commentary on international affairs and is a primary avenue of communication with the country’s workers, instructing them on how they should live and work in changing situations. Essentially, the North Korean authorities are encouraging traders to use the North Korean won more heavily. Analysts have noted, however, that the suggestion is unrealistic due to the heavy reliance of international trade on the US dollar.
“As all commodities and currencies are valued on the basis of the dollar, and as the dollar is the priority payment currency for international trade, the US used this to its advantage of realizing establishment of global dominance order. And the US froze assets and applied pressures and sanctions to any nation that opposed them,” the publication claims.
“The US even abused its leading position in international financial system by wielding its domestic law as if it is international law. The US’ frequent sanctions against other nations are making them to move away from the dollar and search for new international financial system,” it continues.
An expert on North Korea’s economy (who requested anonymity) told Daily NK that sanctions on North Korea “are about preventing the dollar from flowing into the country and it is the US who is controlling the influx. North Korea is trying to mitigate the circumstances, but it’s efforts to promote the use of its own currency in place of the dollar is impractical and more for propaganda.”
It has been widely reported that many North Koreans lost confidence in their nation’s currency following the 2009 currency reform, which led to wider use of foreign currencies such as the US dollar and Chinese yuan.
“North Korean money is as worthless as grass. I do not feel that the authorities are actually recommending people use North Korean currency,” a source in South Pyongan Province told Daily NK over a telephone conversation.
“People have always paid small sums in North Korean money but when they’re buying expensive products like electronic goods, they use the dollar. It seems that the authorities’ recommendation to use our (North Korean) currency is aimed at trade workers who handle a lot of dollars.”
Earlier this month sources told Daily NK that foreign currency is used for large deals, but North Koreans are using the won more often to buy and sell cheaper items in the markets.
However, it was added that the increasing usage of the North Korean won for small transactions was not done willingly, but rather due to foreign currency shortages.
“Continued use of the dollar can devalue North Korea’s won and that can have a negative impact on the economy. In order for the North Korean economy to function normally, it needs to increase trust in its currency,” concluded the expert on North Korea’s economy.
*Translated by Yongmin Lee