Small-scale merchants in North Korean markets who conduct business in local currency say life has become “exhausting” as the country’s internal exchange rates have skyrocketed. Meanwhile, some North Koreans have actually benefited from the soaring rates, deepening economic inequality across the country.
According to a Daily NK source in North Pyongan province, as North Korea’s internal exchange rates climb to what appear to be new daily records, small-scale marketplace vendors who deal in North Korean won are taking a direct financial hit.
“Small-time merchants who sell goods in North Korean won suffer losses even when they adjust prices based on the day’s exchange rate,” the source explained. “And if they don’t sell anything at all, they make nothing for the day. Life is getting harder by the day for people who depend on the marketplace.”
However, the shock of rapidly fluctuating exchange rates doesn’t affect everyone equally. Wealthy North Koreans known as donju, who hold fortunes in foreign currency, remain largely unaffected by the volatile rates. In fact, the exchange rate spike presents an opportunity for donju to accumulate even more foreign currency.
Heavy equipment: A path to wealth
A prime example is the heavy equipment rental businesses that many donju operate.
Demand for heavy machinery like excavators has remained strong for years in gold mining areas such as Unsan, Hyangsan, and Kujang counties. Donju who own this equipment are making substantial profits from rentals.
“Since you can earn $3,000 in monthly profit from just one excavator, people express their envy and say they’d be invincible if they only had such equipment,” the source said. “It’s a business that generates significant money even during normal times, and with exchange rates skyrocketing, donju are even happier.”
The soaring exchange rates are therefore not only destabilizing prices but also making North Korea’s economic polarization structurally entrenched.
Working-class people who earn their living in local currency inevitably face losses, while donju who have accumulated capital in foreign exchange continue building their foreign currency reserves, widening the economic gap.
Ordinary North Koreans describe this reality by saying that while “small sailboats capsize in the waves, big boats enjoy the waves.”
“In North Korea, the exchange rate issue is becoming the dividing line between those who will survive and those who will fall by the wayside,” the source said. “Life is only worth living for those with power or enough capital to avoid the impact of exchange rates, while the majority of lower-class people—at the daily mercy of these rates—face threats to their very survival.”
