North Korea is Almost through with Currency Reform

VLADIVOSTOK. December 7. VOSTOK-MEDIA – The currency reform in North Korea, which was announced on December 30, has nearly completed. The currency reform involved the exchange of only limited amounts of old bills ranging from 100 to 450 thousands per family at a rate of 100:1, regardless of number of family members and income, BBC reports.

To avoid scare buying with the old money many shops closed down for the week. South Korean media have reported that the move triggered massive rallies and circulating of anti-government leaflets throughout the North Korean population. However, this information has not been officially confirmed.

DPRK authorities stated that this measure is aimed at “fighting against growing inflation and economic imbalance” and the move “was welcomed by the overwhelming majority of workers, farmers and civil servants”.

Foreign nationals who are at present in Pyongyang say that hotels, restaurants and gift shops are still accepting US Dollars, Euros and Yuans despite the statement made by a spokesman for the North Korea’s central bank in an interview to The Choson Sibo newspaper published by General Association of Korean Residents that one of the objectives of the currency reform is to abandon the use of foreign currency for payments.
New banknotes in nominal value of 5, 10, 50, 100, 200, 500, 1,000, 2,000, 5,000 won and coins in value of 1, 5, 10, 50 chon and 1 won have been already put into circulation.

The 2,000 won note bears the picture of hut situated on Baekdu Mountain, in which, according to official biography, Kim Jong-il was born. Soviet records show, however, that Kim Jong-il was born in the village of Vyatskoye, near Khabarovsk, in 1941, where his father, Kim Il-sung, commanded the 1st Battalion of the Soviet 88th Brigade, made up of Chinese and Korean exiles.

This is the first time that a picture associated with the present North Korean leader appeared on the country’s currency. As it has in the past, the new highest-denominated note of 5,000 won features the picture of Kim Il-sung.

This is the first time for the past 17 years that DPRK increased considerably the national currency exchange rate. Analysts in Seoul believe that the redenomination of the North Korea’s won was triggered by the necessity to fight against inflation and growing black market.

Meanwhile, the decision of North Korean Government turned out to be a bolt from the blue for the local market. “People were taken by surprise; many of those who managed to save some money rushed to black market to swap the defunct wons for Chinese yuans or US dollars. As a result the foreign exchange rate soared,” a source in North Korea stated.