North Korea’s market exchange rates have been climbing slowly for over a month, despite an expansion in trade.
According to Daily NK’s regular survey of North Korean market prices, the US dollar was trading at KPW 8,400 at a specific market in Pyongyang on Jan. 21, 1.2% higher than in the last survey on Jan. 7.
The KPW-USD exchange rate exhibited similar movement in other regions. In a market in Hyesan, the dollar was trading at KPW 8,460 on Jan. 21, 1.9% higher than on Jan. 7, when it was trading at KPW 8,300.
The market RMB-KPW exchange rate is gradually climbing as well. The yuan was trading at KPW 1,270 in a market in Hyesan on Jan. 21, KPW 10 higher than it was on Jan. 7. In Pyongyang, the yuan was trading at KPW 1,260, 10 won higher than it was on Jan. 7.
The USD-KPW and RMB-KPW exchange rates have been climbing gradually since early-mid December.
The incremental rise in exchange rates despite the recent trade growth appears due to directives trading agencies received following last year’s general reviews and the Central Committee’s year-end plenary meeting, which focused more on “controlling” trade than expanding it.
At the end of last year, North Korean authorities reissued trading certificates, or waku, to trade officials and began reorganizing trading companies.
Trade officials who received new waku have begun trading in January. However, with trade still state-led, individual trading companies or trade officials cannot expand their business in terms of items or volume.
More focus on ideological deviance than expanding trade
North Korean trading companies’ imports have mainly focused on high-end clothing, liquor, jewelry, and other items demanded by the government, with consumer goods for markets accounting for a relatively small percentage of imports.
In particular, the Ministry of External Economic Relations issued an order to regional trading agencies on Jan. 15 that emphasized adherence to “North Korean-style trade,” urging trade officials to avoid “ideological deviations,” including “collusion with South Korea” in their contacts with overseas traders.
In other words, the order focused more on ideologically clamping down on trade officials than presenting policies to reopen and expand trade.
Given that North Korea’s focus is on ensuring the state maintains control over trade, exchange rates are unlikely to move much in response to spikes in demand for the time being.
Translated by David Black. Edited by Robert Lauler.
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