Currencies issued by the Central Bank of the Democratic People's Republic of Korea and used in the country [DPRK 360]
The North Korean won per U.S. dollar rate has jumped nearly 80 percent this year, surpassing the 70,000 won mark for the first time since the 2008 global financial crisis as the currency continues to depreciate.
The findings were included in a report titled “Causes and Outlook for North Korea’s Exchange Rate Surge” (translated), released Wednesday by the IBK Economic Research Institute. North Korea uses the won as its currency unit.
The dollar-won exchange rate in Pyongyang stood at 70,100 won per dollar as of April 12, according to the report.
The value had weakened to 54,200 won on March 29 from 39,200 won on Jan. 4, and further worsened in April.
Exchange rates also vary by area because movement between regions and logistics remains heavily restricted in North Korea. As of April 12, the dollar traded at 70,120 won in Sinuiju, in the northwest, and 70,140 won in Hyesan, near the northern border with China.
North Korea's won per yuan value also weakened by 58.9 percent to 8,900 won per yuan in April from 5,600 won per yuan in January.
The sharp depreciation of the North Korean won was seen as the primary driver behind the exchange rate spike, the report said.
North Korean leader Kim Jong-un attends the 15th Supreme People's Assembly's first session on March 22, in this photo from the Korean Central Television the following day. [YONHAP]
North Korea raised nominal wages by an average of 1,900 percent between 2023 and 2024.
The regime also issued large amounts of won to fund wage payments and secure construction materials while pursuing its “20x10" regional development policy, aimed at building local factories outside the capital.
The institute said liquidity in the market expanded rapidly as authorities additionally issued coupon-style “50,000 won money vouchers” and increased payments through digital won distributed via electronic wallets.
North Korea’s foreign exchange market rate surge is now feeding into inflation. Rice prices climbed 72.7 percent to 28,500 won per kilogram (18 cents per pound) in April from 16,500 won in January. Gasoline prices also rose to 74,500 won per liter ($4.00 per gallon) from 42,000 won, up 77.4 percent over the same period.
“Inflationary pressure stemming from the large-scale issuance of North Korean won could lead to a collapse of confidence in the monetary system,” the institute said.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
댓글
0