{"id":4312,"date":"2019-08-19T18:21:33","date_gmt":"2019-08-19T09:21:33","guid":{"rendered":"http:\/\/www.01.asiapress.org\/rimjin-gang\/?p=4312"},"modified":"2022-01-24T15:16:29","modified_gmt":"2022-01-24T06:16:29","slug":"plummeting-rate","status":"publish","type":"post","link":"https:\/\/www.02.asiapress.org\/rimjin-gang\/2019\/08\/recommendations\/plummeting-rate\/","title":{"rendered":"The Weakest Won: Markets Run Entirely in Chinese RMB as Shoppers Abandon their Sanctions-Hit Currency"},"content":{"rendered":"
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(Photo) A woman selling Chinese-made sausages on the streets in front of a downtown Pyongyang apartment building. Photographed in the Peony District in July 2011 by Koo Kwang-ho (ASIAPRESS)<\/p><\/div>\n

On August 6, the exchange value of the North Korean won took a massive dive. According to a survey of various cities in the northern region of the country, the won\u2019s value, in comparison to the US dollar, fell by 9.92% and, in comparison with the RMB, fell by 9.15% since the last survey, which was conducted on July 17,<\/p>\n

The direct cause is the rise of the US dollar in the international foreign exchange market. However, the North Korean won took a comparatively greater hit than other currencies. This could be due to the impact of the economic sanctions but more time is needed for observations to know for certain.<\/p>\n

According to the survey taken on August 6, the price for 1 RMB is 1,350 North Korean won and the price for 1 US dollar is 9,643 won.<\/p>\n

\u25c6 Markets not in chaos<\/h2>\n

An ASIAPRESS reporting partner was asked how the RMB is currently being used at markets.<\/p>\n

Q. If the RMB rises, the price of the products goes up as well. Has this caused chaos at the markets?<\/p>\n

A. There is no chaos whatsoever at the markets. The currency traders check the latest Pyongyang market prices at 10 a.m. each morning to determine the exchange rates.<\/p>\n

More than 90% of the money currently used at markets is RMB. Possibly the only ones using North Korean won are the old ladies selling sunflower seeds or pine nuts on the outskirts of the market. These days, even tofu is being sold in RMB. If a customer only has North Korean won, however, the vendor will accept the cash before going to exchange it for RMB that same day.<\/p>\n

Q. Before, there was a crackdown on using foreign currency...what about these days?<\/p>\n

A. There has always been a crackdown, but it\u2019s fine so long as you\u2019re not caught. Merchants don\u2019t use North Korean money but they always keep some in their wallets. It\u2019s just to show officers, in case they\u2019re cracking down on it. They keep their Chinese money in another pocket.<\/p>\n

Q. Are there a lot of complaints from people who don\u2019t feel comfortable spending North Korean money at the market?<\/p>\n

A. Until about 2 years ago, some people would report merchants who refused to take North Korean money to the market management office. Nowadays, however, nobody does that. Everyone, of course, now brings Chinese money with them to the market.<\/p>\n

Next page : \u25c6 All prices calculated in RMB...<\/strong><\/p>\n

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(Photo) A woman hands over a 1 won note in change. Of course, one can shop using Chinese yuan. Photographed in Hyesan City, Ryanggang Province in October, 2013 (ASIAPRESS)<\/p><\/div>\n

\u25c6 All prices calculated in RMB<\/h2>\n

Q. Is there a difference in price when paying for something in RMB or North Korean won?<\/p>\n

A. Of course there is. For example, with the exchange rate now at 135,000 North Korean won per 10 yuan (as of August 6), shoes that cost 100 RMB, will cost a customer a relatively pricey sum of 1000-2000 North Korean won. This is because the exchange rate is a bit worse when you are trading North Korean won for RMB.<\/p>\n

Q. When you receive North Korean won, do you exchange it immediately for RMB?<\/p>\n

A. If you are conducting business in North Korean won, you can get your payments exchanged immediately or you can wait to convert it all at once afterwards. In the evenings, the currency traders go around the stalls and ask vendors if they want to convert their day\u2019s earnings.<\/p>\n

Q. What makes the RMB so convenient?<\/p>\n

A. RMB is convenient because it does not get too bulky, even if the amount is large. These days, even when a company receives products, everything is listed in RMB, so all prices are calculated in RMB Everyone wants to have things in RMB so as to not be confused by the exchange rate.<\/p>\n

\u203b Currency Exchange: On November 30, 2009, the North Korean government unexpectedly announced its decision to reform its currency, suddenly cutting the North Korean won to one-hundredth of its value. The people had only a week to exchange their money for the new currency, at a limit of 100,000 won at a time, before the money would become worthless. In the panic, there were many who suffered heavy losses to their savings.<\/p>\n

\u25c6 Our country can\u2019t survive on its own, so we depend on Chinese money<\/h2>\n

Q. Do you think the RMB is more safe?<\/p>\n

A. Definitely. China is a bigger country than ours and there will never be a sudden \u201ccurrency reform\u201d. Our country is under economic sanctions, so we don\u2019t know what will happen to the currency value or when. Rich people are saving up US dollars and spending RMB.<\/p>\n

Q. What do you think about spending Chinese money as a North Korean? Are you not discontented with your country?<\/p>\n

A. Our pride is hurt. Honestly, because our country is incompetent. We depend on Chinese money. Our country is like China, just speaking Korean. We\u2019re using Chinese money to buy Chinese products. Without China, our country would be at a loss. The government says we are \u2018self-reliant\u2019 but there are no results whatsoever.<\/p>\n

Note: On August 8, the exchange rate for RMB recovered slightly, trading at 1 RMB per 1,300 won. (Kang Ji-won \/ ISHIMARU Jiro)<\/p>\n

\u203bASIAPRESS contacts its reporting partners in North Korea through smuggled Chinese mobile phones.<\/p>\n

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