After plummeting to new lows right after the Eighth Party Congress, the USD-KPW exchange rate has begun climbing as hopes grow that trade will soon resume. In fact, small-scale smuggling has started in certain regions, and there is talk that the border lockdown will be lifted in the first half of the year.
Daily NK’s own reporting determined that as of Monday, the North Korean won was trading at KPW 7,300 to the dollar in Pyongyang, KPW 7,400 in Sinuiju and KPW 7,420 in Hyesan.
Compared to Jan. 11, the rate had climbed 20% in Pyongyang, 25% in Sinuiju and 28% in Hyesan.
The RMB-KPW exchange rate also climbed. Daily NK determined on Monday that the yuan was trading at KPW 980 in Pyongyang, KPW 1,000 in Sinuiju and KPW 1,080 in Hyesan. This means that since Jan. 11 the exchange rate has risen 10% to 16%, depending on the region.
The yuan has risen less precipitously than the dollar because the Chinese currency’s depreciation had been less dramatic than that of the greenback. What’s more, people have continued to use yuan in some regions along the Sino-North Korean border even after the border was sealed.
Expectations that trade will resume are reportedly fueling the recent turnaround in the exchange rates, which had been plummeting since October.
A source in North Korea said there is talk in North Pyongan Province that trade will start around February or March. “There are even trading companies that have already begun preparations,” he said.
Some trading organizations reportedly have even been given new waku (trade certificates).
It appears that the exchange rate has soared as companies and traders have begun acquiring dollars in preparation for the restart of trade.
In particular, smuggling is restarting little by little in Sinuiju, Ryongchon and other places in North Pyongan Province. The border patrol continues to shoot smugglers on the spot when caught doing illegal activities. However, smugglers that have solid connections with soldiers enforcing the border have nonetheless restarted their operations in the face of danger.
In Yanggang Province, however, there are only rumors that trade across the Sino-North Korean border will restart around May or June. Workplaces in the province have yet to begin actual preparations to restart trade.
According to the source, trade in North Pyongan Province is mostly official trade carried out by state-sanctioned companies and individuals. In Yanggang Province, meanwhile, there are many areas where smuggling is rampant. Accordingly, the source claims the authorities are delaying the restart of trade in the province.
However, many traders and smugglers based in Yanggang Province also say that they will move to Sinuiju or other cities in North Pyongan Province to restart their activities if cross-border trade in the province is the first to open up.
“Fast-moving smugglers are already busy making connections with traders on the Chinese side in Dandong and border patrol troops serving around Sinuiju,” said the source. “There are plenty of people who say they will begin work anywhere as soon as trade opens up, even if the bribes are expensive.”