Authorities in North and South Hamgyong provinces have recently been cracking down on money changers, Daily NK has learned.
“Anyone who steps foot in [Hamhung’s] currency exchange district, whatever the reason, is being hauled off by the police and thrown into jail,” a reporting partner in South Hamgyong Province told Daily NK on Tuesday, speaking on condition of anonymity due to security concerns.
The reporting partner said that Hamhung’s police department has been watching more closely for people involved in illegal currency exchange and remittances since the beginning of April.
Following the outbreak of COVID-19, North Korea has been moving to bring food sales and trade under the strict control of the state. The recent crackdown on money changers is part of the government’s effort to control the currency market, the reporting partner said.
“The government is pushing individuals to use state-run banks, but most people still work with money changers. Banks aren’t very trusted, and their fees are more expensive than those charged by money changers,” he said.
In Hamhung, for example, banks charge a 5% fee for transferring money to other provinces, while individual money changers only charge 3%. A transfer of KPW 1 million would cost KPW 50,000 at a bank, but KPW 30,000 at a money changer.
“When people are struggling to buy a kilogram of rice, they have to make their money last. Nobody wants to pay more for the same service, so you’ve got a lot of people doing business with money changers. That’s the kind of behavior the government is cracking down on,” the reporting partner said.
The Hamhung police have been randomly searching the homes of big-time money changers and bringing them in for questioning. Even little fry who are linked to the big-timers are getting caught up in the dragnet.
Arresting the major players is designed to terrify other money changers and force them to curtail their operations, the reporting partner said. And because the small-timers make a living by trading foreign currency at the marketplace throughout the day and then selling it to the big-timers for a profit, arresting the big-timers can have a huge impact on the small-timers’ livelihood, he explained.
The authorities’ clampdown on money changers is also taking place along regions on the China-North Korea border.
“The police in Hoeryong arrested two notorious money changers at the beginning of April and confiscated all the money that turned up in a search of their homes. Nobody has dared to set foot in the currency exchange marketplace since then, and some money changers have been surreptitiously doing business at home to stay under the radar,” another reporting partner in North Hamgyong Province said, speaking on condition of anonymity.
“The families of defectors in the interior of the country want to have private money changers handle remittances from China or South Korea; they wouldn’t dream of working with banks. Bank transactions leave a paper trail that could have them tailed and surveilled. On top of that, banks charge higher fees than individuals.”
Translated by David Carruth. Edited by Robert Lauler.
Daily NK works with a network of reporting partners who live inside North Korea and China. Their identities remain anonymous due to security concerns. More information about Daily NK’s reporting partner network and information gathering activities can be found on our FAQ page here.
Please direct any comments or questions about this article to dailynkenglish@uni-media.net.
