North Korea’s Ministry of State Security recently arrested two money changers in Pyongsong for manipulating exchange rates, Daily NK has learned.
“Two sisters in their forties who were moving large amounts of foreign currency in Pyongsong were arrested by the Ministry of State Security on Sept. 15. The sisters, surnamed Kim, had swayed exchange rates and market prices in Pyongsong for the last decade,” a source in South Pyongan Province told Daily NK on Wednesday.
According to the source, the Kim sisters, who got their start selling cigarettes on the street in 2011, had eventually made a name for themselves as major financiers and money changers who handled large sums of money.
When the Kim sisters divvied up a 10-ton delivery of cigarettes from a Pyongyang factory to wholesalers and retailers in Pyongsong, for example, they would pocket extra by accepting foreign currency at less than the market rate and charging more for Korean won. Then they would turn around and sell the foreign currency they had brought in for more than the market rate.
The Kim sisters’ behavior had a very disruptive impact on market exchange rates in Pyongsong, the source said.
Such circumstances have convinced the North Korean government that major entrepreneurs and financiers are largely responsible for market disruptions, leading to tighter controls and stricter enforcement against figures moving around large sums of money.
Along the border with China and in major cities such as Pyongyang, Pyongsong and Hamhung, the authorities are reportedly keeping constant watch on figures who impact market prices by distributing goods or manipulating exchange rates.
But since entrepreneurs and financiers who get caught can still avoid punishment through bribery, law enforcement agencies are unable to effectively crackdown on them, the source said.
When North Korea adopted emergency pandemic measures following its acknowledgement of a COVID-19 outbreak in the country, the Kim sisters were accused of violating pandemic rules on several occasions by the health authorities and the unified command on non-socialist and anti-socialist behavior, but they were able to grease enough palms to avoid punishment.
But the Kim sisters were finally arrested, the source said, after a person who had been following their behavior for several years went above the heads of the municipal and provincial branches of the Ministry of State Security and reported the matter directly to the national headquarters.
“The details of the Kim sisters’ arrest by the Ministry of State Security haven’t been released. However, their downfall seems to have been triggered by multiple complaints from people who were sick of seeing them flaunt their wealth,” the source said.
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