Wholesalers in some parts of North Korea have recently been demanding that market merchants pay in dollars for items they received on credit, Daily NK has learned.
Speaking on condition of anonymity, a Daily NK source said last Friday that “wholesalers in Chongjin who used to take payment in yuan for items provided to market merchants on credit have suddenly begun asking for payments on dollars recently.” He said the market merchants are “bewildered by the abrupt demand.”
According to the source, Chongjin wholesalers began demanding market merchants pay in dollars early this month.
Concern that the yuan, which has dramatically strengthened recently, could collapse at any time amid rumors of a potential war between China and the United States is directly fueling the wholesalers’ demand, the source said.
“People say if a war breaks out between China and the U.S., the value of the yuan could instantly plummet, and people holding yuan could take huge losses,” the source said. “In response, people with yuan are rushing to change their money into dollars, and in this atmosphere, wholesalers have begun demanding payments in dollars.”
In these circumstances, the KPW-USD exchange rate is climbing as demand for dollars increases, with merchant losses growing as a result.
“Merchants were already struggling to pay off the principle with the KPW-RMB exchange rate climbing, so if they ask for dollars, the losses are magnified further,” the source said. “If the KPW-USD rate climbs, deficits inevitably grow because you have to change even more yuan into dollars.”
“Like the saying, ‘Only the shrimps die when whales fight,’ the people who suffer are ultimately the people struggling the most economically,” the source said. “People with money are trying to avoid losses, but with poor people continuing to take losses, they say they even want a war to break out — regardless of whether they live or die — so that there’s a change.”
Wholesalers in Hyesan, Yanggang Province, have also recently begun demanding payment in dollars.
A source in Yangang Province said rumors are circulating that with relations between China and the U.S. growing gradually worse, “a war could break out at any moment,” in which case “the dollar would be fine, but the yuan would plummet.”
As a result, wholesalers in Hyesan have begun demanding merchants pay for items in dollars instead of yuan. Some merchants have openly expressed their unhappiness with this to the wholesalers, sparking tensions.
“People who were indifferent to war before are now reacting sensitively to talk of war, especially people with money, perhaps because they know wars are ongoing in several countries,” the source said. “This is only amplifying the economic difficulties of market merchants.”
Translated by David Black. Edited by Robert Lauler.
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May 17, 2024 at 12:30PM
by DailyNK(North Korean Media)