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N. Korean government under fire as market exchange rates skyrocket

North Korea’s market exchange rates continue to skyrocket. Amid the resulting chaos, North Koreans have begun to criticize the government’s actions.

According to Daily NK’s regular survey of market prices in North Korea, the dollar traded at KPW 14,200 in Pyongyang on June 23, up 17.4% from June 9, when it traded at KPW 12,100.

The KPW-USD exchange rate rose by similar amounts in other regions. In Sinuiju, North Pyongan Province, the dollar traded at KPW 14,100 on June 23, up 17.5% from the previous survey on June 9.

The North Korean market exchange rate of KRW-USD suddenly jumped more than 35% from KPW 8,000-9,000 to KPW 12,000 – 13,000 as authorities restricted foreign exchange transactions.

The current exchange rate marks the first time since North Korea’s currency reform in 2009 that the exchange rate has exceeded the KPW 14,000 threshold.

A source in Pyongyang said the exchange rate “goes up every time you wake up in the morning” and that “each day, it’s scary to check the price of the dollar.”

The North Korean KPW-RMB exchange rate has also risen noticeably recently. On June 23, the yuan was trading at KPW 1,950 in Sinuiju, 7.1% higher than in the June 9 survey, when it was trading at KPW 1,820.

On June 23, the yuan was traded at KPW 1,960 in Hyesan, Yanggang Province, after appreciating by a similar amount.

The yuan has appreciated relatively little against the dollar because North Korean authorities have focused their crackdown on dollar exchange and remittances rather than yuan transactions.

Regardless, the sharp rise in North Korea’s market exchange rates can be attributed to poor market circulation of foreign currency due to government restrictions and rising demand for foreign currency.

Regime cracks down hard on private remittances

In fact, the government has recently clamped down on private remittances. In the past, foreign currency circulated between regions through private transfer agents who facilitated the delivery of foreign currency from one person to another. However, “strike teams” of police and state security personnel have now cracked down on private exchange and transfer of foreign currency, making it more difficult for foreign currency to circulate between regions.

Several transfer agents in Chagang and Yanggang provinces suddenly disappeared earlier this month. A source in Chagang Province confirmed that they are being questioned by local branches of the Ministry of State Security. All of the remittance brokers in question were transporting foreign currency to other regions and were caught by state security agents during a nationwide crackdown on private money transfers.

The strike teams hide within the movement radius of the money transfer agents to ensure that they do not transport foreign currency from one region to another.

In addition to this intense crackdown by the North Korean authorities on private remittances, the growing demand for foreign currency as trade expands since North Korea launched its “20×10” regional development program has also contributed to the spike in exchange rates.

Inside North Korea, there is growing dissatisfaction with the government’s requirement that people conduct foreign exchange transactions only in banks, which they blame for driving up exchange rates.

“Banks don’t pay you as much as the market rate, which is rising every day, and they don’t sell you foreign currency, so it’s impossible to do transactions there,” a source in Pyongyang said. “Many people complain that the government is simply restricting the activities of private money transfer agents or money changers.”

Daily NK works with a network of sources living in North Korea, China, and elsewhere. Their identities remain anonymous for security reasons. For more information about Daily NK’s network of reporting partners and information-gathering activities, please visit our FAQ page here.

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

Read in Korean

July 03, 2024 at 07:00AM

by DailyNK(North Korean Media)

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