North Korea’s exchange rates have skyrocketed since the restart of China-North Korea freight train service after a two-year hiatus. There is also a great deal of confusion among North Korean traders because the authorities have issued no directives regarding the restart of trade.

According to multiple Daily NK sources in North Korea, the rates for the dollar and yuan began climbing immediately after a North Korean freight train pulled into Dandong, China on Jan. 16.

As of Jan. 20, the North Korean won had climbed to KPW 5,700 against the dollar in Sinuiju.

Compared to Jan. 11, when the rate stood at KPW 4,700 against the dollar, the greenback had strengthened over 20% in just nine days.

The price of yuan climbed, too. The yuan was trading at KPW 600 on Jan. 11, but climbed to KRW 700 by Jan. 20, after the restart of China-North Korea freight train service.

The dollar rate held on at KPW 8,000 and the yuan rate at KPW 1,200 even after North Korea closed the border in Jan. 2020, but began falling as demand for foreign currency declined with the protraction of the border closure. 

Recently, dollar and yuan had been trading in the KPW 4,000 and KPW 600 range, respectively, about half of the rate prior to the border closure.

However, foreign exchange rates immediately began climbing with the restart of freight train service with China, with the rate clearly rising in major cities such as Pyongyang and Chongjin, North Hamgyong Province.

coronavirus construction materials train
The Sino-North Korean Friendship Bridge, which connects the Chinese city of Dandong with the North Korean city of Sinuiju. / Image: Daily NK

Even in Chongjin, the greenback was trading at KPW 5,570 on Jan. 20.

The rate is climbing at a similar rate in Pyongyang, but the dollar and yuan are trading at slightly lower prices than in Sinuiju.

Daily NK understands that some traders are buying dollars and yuan in the expectation that trade will expand following the restart of international freight train service.

However, the temporary nature of the restart of freight train service and the lack of directives from the authorities regarding trade are amplifying confusion among provincial trading agencies and traders.

Some traders are buying foreign exchange in expectation of expanded trade, but local trade officials in Yanggang Province, the two Hamgyong provinces, and elsewhere are holding off.

One trader in Yanggang Province said if the restart of trade is limited to Sinuiju, there is little for traders in Yanggang Province and the two Hamgyong provinces to do. He added that while some people feel they must buy dollars or yuan now, he personally doubted it was worth stocking up on foreign exchange as it is uncertain whether he could participate in renewed trade.

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

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Seulkee Jang is one of Daily NK's full-time journalists. Please direct any questions about her articles to dailynkenglish@uni-media.net.