The Chinese Yuan-North Korean Won exchange rate is exceedingly volatile these days even by North Korean standards.
Having struck a high point of 1300 North Korean Won on the 27th, a 44% rise over the rate the previous week, by the afternoon of the 30th the exchange rate had lost some of that value, falling back to 1100won. Nevertheless, 1100won is still extremely high; the price of Yuan only topped 1000won on the 27th, though it subsequently fell back.
In line with the rising exchange rate, rice is currently selling at very high prices; approximately 6500 Won in Hyesan, Yangkang Province yesterday. This is a huge increase; from 3000won/kg at the beginning of June to 4000won/kg at the beginning of August.
According to a source from the city, people cite the introduction of new economic management measures as the cause.
“People know that when new economic measures get announced, the prices of goods skyrocket,” she explained. “Among the economic measures there is both a dramatic rise in wages and the raising of prices to realistic levels, and as people are now learning about those so rice keeps going up.”
As a result of the rising price of rice, sellers are concerned at losing out even if they do sell, while buyers are leery about buying, preferring to fall back upon corn, which is 50% cheaper on average. As a result, sales of rice are flat.
The reason why news about new economic measures is able to inspire such volatility is that high rates of inflation also occurred on previous occasions when economic measures were implemented, noticeably the July 1st Economic Management Reform Measure of 2002 and the currency redenomination of November 2009. At this point, the source noted, people’s fears about the ‘June 28th Policy’ are greater than their expectations.
