A picture of Songjon Station in Yanggang Province. (Xundaogong, Wikimedia Commons)

The KPW-USD exchange rate has recently climbed into the KPW 8,000 range in Hyesan, Yanggang Province.

A Daily NK source in Yanggang Province said Wednesday that the KPW-USD rate has been sharply climbing in Hyesan since July 16.

“It seems the rate is being impacted by donju [North Korea’s wealthy entrepreneurial class] and the trading sector buying up lots of foreign currency starting last week,” he said.

According to the source, the dollar rate held steady in the KPW 7,000 – KPW 8,000 range in Hyesan through the middle of July, but then climbed past KPW 8,000 from Monday. In fact, the dollar was trading at KPW 8,300 in Hyesan as of Monday.

Although the KPW-USD exchange rate has climbed sharply, the KPW-RMB exchange rate seems to be holding relatively steady.

Through so-called “remittance brokers” who maintain constant contact with the outside world and people who use foreign-made smartphones, information is filtering into North Korea that the dollar is strengthening worldwide. Additionally, rumors are reportedly circulating in North Korea that the dollar rate will continue to climb.

In response to this information, donju, money changers and traders are buying up dollars. The growing numbers of people buying dollars, rather than selling them, is propelling the rise in the exchange rate, according to the source.

“With the borders continuing to remain closed, people are making money in different ways and are using information about international markets,” he said. “For example, they make money by buying dollars if they get information that the exchange rate is expected to climb in the international market, and sell dollars if it seems the rate will fall.”

The source also said that people will face significant difficulties if the KPW-USD exchange rate climbs above KPW 10,000.

“People hope the recent spike in the exchange rate is only a temporary phenomenon,” he added.

Meanwhile, as of Monday, a kilogram of rice cost KPW 6,600 in Hyesan’s markets, while a kilogram of corn cost KPW 3,300.

This was KPW 400 and KPW 150 more, respectively, than what rice and corn cost during Daily NK’s regular survey of North Korean prices on July 10, when rice cost KPW 6,200 a kilogram and corn KPW 3,150 a kilogram.

North Korean media reported on Saturday that the harvest for barley and wheat — two grains used as alternatives for rice — was entering its final stage, with 98% of the harvest completed. However, market food prices continue to climb, a phenomenon some observers attribute to poor harvest forecasts this year.

In particular, shrinking rice imports due to the fall in China-North Korea trade is also influencing rising food prices.

Accordingly, North Koreans are suffering from deepening hardships. The source said there are more and more families worrying about how they will put meals on the table in the face of rising prices.

Please direct any comments or questions about this article to dailynkenglish@uni-media.net.

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