Yuan Making the Market Go Round

The U.S. Dollar and Chinese Yuan are back in widespread use in North Korea’s markets now that a ban on foreign currency use implemented in the wake of Kim Jong Il’s death has begun to fade into insignificance, Daily NK has learned.

A source from northerly Yangkang Province commented on market conditions over the phone on the 18th, saying, “Almost all transactions are now being done in Chinese Yuan. Chosun rice is selling for five Yuan per kilo, Chinese rice for four. Small household things like clothes and shoes are being bought and sold in Yuan, too.”

“The security forces’ crackdown has all but disappeared,” she went on. “Even if People’s Safety Ministry agents see people in the jangmadang conducting transactions in Yuan, they don’t seem to mind.”

However, “Demand for the Yuan is rising now that Yuan and U.S. Dollar transactions are permitted in the jangmadang and market transactions are getting more active, so money changers are increasing the price of Yuan.”

Accordingly, the price of the Chinese currency had risen from 635 North Korean Won last week to 670 Won yesterday.

The authorities are also hindering product circulation by implementing strict limitations on movement between regions in the run up to Kim Il Sung’s birthday, and this is having an effect on prices.

“It’s not just that they are forbidding entry into Pyongyang City, they are also limiting the issuance of permits to travel between regions, so prices are skyrocketing. Goods are not being supplied to Pyongsung, Wonsan, Sariwon etc, so traders are having problems, too,” the source explained.

As a result, rice that had declined to just 3,000 won per kilo by last week had reportedly gone back up to 3,800 won by the 17th.

“As soon as rice that used to get into the interior stopped entering in bulk, traders started increasing their prices,” she added. “It is possible that the price might reach 4,000 won by next week.”