A photograph of a cash coupon issued in 2021 obtained from a defector. (ASIAPRESS)

◆ Increasing distrust toward the North Korean won

The North Korean won is currently experiencing sharp depreciation against the US dollar and Chinese yuan.

ASIAPRESS collects exchange rates once a week from areas in Ryanggang and North Hamgyung provinces. The exchange rates reflect transactions conducted unofficially in markets.

According to an ASIAPRESS reporting partner, the North Korean won (KPW) recently recorded its lowest value ever against the US dollar (USD) and Chinese yuan (RMB), with 1 RMB equaling 880 KPW and 1 USD equaling 7,900 KPW on July 29. In early 2022, the North Korean won was 635 to 1 RMB and 4,700 to 1 USD, meaning that the yuan rose by 39% against the North Korean won, while the US dollar rose in value by 68% against North Korea’s official currency.

The reporting partner explained that the continued increase of the US dollar and yuan against the won was because “with the impending restart of trade with China, trading companies are taking pains to collect foreign currency.” He also noted that while the impact of the strength of the US dollar internationally is having an impact on the fall in the value of North Korea’s won, companies trying to obtain funds to import goods is also having an influence on the depreciation.

Faced with a continued fall in value of the North Korean won, people in North Korea are increasingly distrustful of their own country’s currency.

According to the reporting partner, “While government crackdowns on the use of foreign currency are really harsh, businesspeople try as best they can to avoid possessing North Korean won. Everybody’s desire to have foreign currency has intensified. Even donpyo aren’t used in the markets anymore.” (KANG Ji-won)

※ Donpyo are cash coupons issued by North Korea’s Central Bank. The coupons were issued in August and September of 2021 by the Kim Jong Un regime, which faces shortages of funds.

※ ASIAPRESS communicates with reporting partners through Chinese cell phones smuggled into North Korea.