The Chinese yuan is currently trading at KPW 1,300 in the border regions of North Hamgyong Province and Yanggang Province, Daily NK has learned.
“Since early this week, the KPW-RMB exchange rate has been on the rise in Hoeryong,” a reporting partner in North Hamgyong Province told Daily NK on Apr. 27, speaking on condition of anonymity due to security concerns. “The increase in the exchange rate appears to be the result of rumors circulating in Hoeryong that customs houses will reopen starting next month.”
According to the reporting partner, the yuan was trading at KPW 1,100 in Hoeryong last week but rose to KPW 1,280 as of Apr. 26. The exchange rates seem to be on track to return to the pre-pandemic rate of around KPW 1,300.
A review of Daily NK’s regular survey of North Korea’s KPW-RMB market exchange rates shows that the yuan held steady at KPW 1,100 until mid-October of 2020, began to steadily decline in November, and plummeted to KPW 800 beginning in December 2020.
While the exchange rate occasionally bounced back to the KPW 900-1,000 range, it nose-dived to just KPW 600 in June 2021 and has been holding at KPW 800 since 2022. At the end of last year, the exchange rate rallied to KPW 1,100 and has hovered around KPW 1,100 until recently.
In early 2023, Daily NK’s exchange rate surveys found that the exchange rate rose to a little over KPW 1,200; however, this last week marks the first time the rates have returned to KPW 1,300.
Indicators of a strengthening yuan have appeared in Hyesan, Yanggang Province, with an exchange rate of KPW 1,300 recorded on Apr. 26. This marks an approximately KPW 100 increase over the exchange rate just a few days prior, which hovered just above KPW 1,200.
“There are rumors going around Hyesan that the customs house will reopen next month, and some people are even going so far as to say that smuggling activities will fully restart next month, too. This explains why the KPW-RMB exchange rate is rising,” a reporting partner in Yanggang Province said.
“Recently, border guard officers in Hyesan have been visiting smugglers’ houses to tell them that they’ll cover for their smuggling activities [for bribes], so smugglers should begin preparing small items like metal for trade. Smugglers are convinced that smuggling activities are set to restart in earnest since the military personnel coming to arrange bribes are high-ranking officers, not just ordinary soldiers.”
Against this backdrop, demand for the yuan has surged and caused the exchange rate to rise as a result, the reporting partner said.
That being said, money changers appear cautious about conducting transactions in yuan, he said.
“If the customs house reopens and the door is flung wide open for smuggling activities, it’s possible that the exchange rate might rise higher still. But if the re-opening is pushed back again, this will naturally lead to a fall in the exchange rate. That’s why money changers are proceeding with caution.”
Translated by Rose Adams. Edited by Robert Lauler.
Daily NK works with a network of reporting partners who live inside North Korea and China. Their identities remain anonymous due to security concerns. More information about Daily NK’s reporting partner network and information gathering activities can be found on our FAQ page here.
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