North Korea’s exchange rates have been fluctuating wildly from day to day as the country’s border with China remains closed, Daily NK has learned.

“We haven’t seen exchange rate fluctuations like this since before the 2010s,” a South Pyongan Province-based source told Daily NK on Monday. “Currency brokers are facing fluctuations in currency exchange rates that rise and fall over just days.” 

Fluctuations in the exchange rate between the North Korean won and the US dollar are making their way across the country, according to the source. In Pyongsong on May 5, for example, one USD started trading at KPW 8,150 but then rose to KPW 8,500 before suddenly falling back down to KPW 7,500 – all in the course of one day. 

Now, one USD is equal to KPW 8,400 in the city, which is about KPW 1,000 more than the selling price in late April, the source said. 

When the North Korean state adopted a new set of currency reform measures on Nov. 30, 2009, one USD, which had been selling for KPW 3,800, suddenly began selling for just KPW 130.

The exchange rate between the USD and KPW gradually stabilized over the two years following the implementation of the currency reform measures in 2009. By 2011, one USD was selling for KPW 4,000-5,000 and by mid-2014 one USD was equal to around KPW 8,000.

The closure of North Korea’s borders in late January, however, has led to comparatively wild fluctuations in the exchange rate as well as in commodity prices. 

“Even ordinary sellers who have long conducted relatively stable transactions in foreign currency are now afraid of losses because of dramatic fluctuations in the exchange rate,” the source told Daily NK. “Recently, the changes have been so frenzied that it’s not exaggerating to say that the prices in the afternoon will be different from the prices in the morning.”

“Wholesalers at the Pyongsong Market whose main patrons are other wholesalers throughout the country are complaining about the impact of the fluctuations in the exchange rate,” continued the source. “There are such major changes in the exchange rate between when wholesalers receive goods and then pass them along to retailers that uncertainty prevails.” 

Citing exchange rate fluctuations of around KPW 1,000 in the past, some people reportedly do not believe that the fluctuations are a big deal. Yet, “most people think that we can’t sit idly by because the prices of imported goods are [also] increasing,” the source said. 

“The damage done to businesses due to the exchange rate [fluctuations] and the increase in commodity prices are making things difficult for those who deal with transactions in foreign currency,” he added.

*Translated by Violet Kim

Please direct any comments or questions about this article to dailynkenglish@uni-media.net.

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Kang Mi Jin
Kang Mi Jin is a North Korean defector turned journalist who fled North Korea in 2009. She has a degree in economics and writes largely on marketization and economy-related issues for Daily NK. Questions about her articles can be directed to dailynkenglish@uni-media.net.