North Korea’s internal exchange rates have held steady since July. Trade with Russia may grow in the wake of the recent summit between the North Korean and Russian leaders, but even this is having little impact on the country’s exchange rates.
According to Daily NK’s regular survey of market prices in North Korea, the dollar was trading at KPW 8,380 in a market in Pyongyang on Sept. 17, the same as it was on Sept. 3.
The dollar has held steady in the KPW 8,300-8,400 range in Pyongyang for a month since Aug. 20.
The dollar was trading at more or less the same rate in Pyongyang, Sinuiju, and Hyesan. The KPW-USD exchange rate in Sinuiju and Hyesan was KPW 8,390 and KPW 8,400, respectively, as of Sept. 17.
North Korea’s KPW-USD exchange rate has been fluctuating by small amounts between KPW 8,000 and KPW 8,400 since the second half of last year, when trade with China increased.
After the North Korean authorities closed the country’s borders in January 2020, North Korea’s exchange rates suddenly climbed or fell as people kept their eyes on signs of expanding trade. With the recent expand in trade, however, the KPW-USD exchange rate has recovered to its pre-border closure level.
Little fluctuation in yuan exchange rate, too
In the latest survey, the KPW-RMB exchange rate climbed the most in Sinuiju, where it was trading at KPW 1,275 as of Sept. 17, 0.4% higher than it was on Sept. 3, when it was trading at KPW 1,260.
As was the case with the dollar, the yuan was trading at more-or-less the same level across the country. The yuan has held steady in the KPW 1,200-1,300 range in Pyongyang, Sinuiju, and Hyesan since July.
The KPW-RMB exchange rate fell as low as KPW 500 in June 2023 due to restrictions on trade and the ban on smuggling in border regions at the time. However, since the yuan climbed back to KPW 1,100 last December, the Chinese currency has continued to fluctuate by small amounts between KPW 1,100 and KPW 1,400.
The results of the survey indicate that North Korea’s market exchange rates have stabilized compared to the period between 2020 and 2022, when the authorities imposed harsh restrictions following the border closure.
However, given North Korea’s expanding trade volume and continued interest among North Koreans about the status of the border, some observers say the fluctuations in the exchange rates appear unnaturally mild.
“Usually, exchange rates noticeably climb when trade with China expands, so the current movement in North Korea’s internal exchange rates makes little sense when you compare it with the past,” said Lim Song, an economist with the North Korean Economy Team of the Bank of Korea’s Economic Research Institute in Seoul.
“There must be several reasons [for the lack of significant fluctuation], but the North Korean authorities could be managing the exchange rates through indirect intervention in the market, such as placing a ceiling on rates,” he said.
According to China’s customs authority, China-North Korea trade reached USD 191.13 million in August, a 5.2% on-month increase. This was 111.6% higher than in August of last year, and 80.9% of what it was in August 2019, prior to the COVID-19 pandemic.
Translated by David Black. Edited by Robert Lauler.
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