{"id":4562,"date":"2020-05-07T10:43:33","date_gmt":"2020-05-07T01:43:33","guid":{"rendered":"http:\/\/www.01.asiapress.org\/rimjin-gang\/?p=4562"},"modified":"2022-05-16T18:01:10","modified_gmt":"2022-05-16T09:01:10","slug":"confiscation","status":"publish","type":"post","link":"https:\/\/www.02.asiapress.org\/rimjin-gang\/2020\/05\/recommendations\/confiscation\/","title":{"rendered":"\uff1cKim Jong-un Regime\uff1e Cash Grab: Dictator Orders Crackdown to Confiscate Foreign Currency During Coronavirus Trade Crash"},"content":{"rendered":"
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(File photo) A merchant trading in RMB at an open-air market. She holds in her hand 1 RMB in change. Photographed in Ryanggang Province in October 2013 (ASIAPRESS)<\/p><\/div>\n

\u25c6 Authorities intervene in the foreign exchange market<\/h2>\n

Since the end of April, North Korean authorities have been attempting to regulate exchange rates at markets. This began with a crackdown launched by the nation\u2019s security agencies against the use of foreign currency by ordinary citizens. According to a local reporting partner, \u201c[The crackdown is now] stricter than ever before. I can\u2019t even take out Chinese banknotes at the market.\u201d For this report, ASIAPRESS collected information from Pyongyang, adding to data gathered from market surveys conducted on May 4 in North Hamkyung Province and Ryanggang Province. (Kang Ji-won)<\/p>\n

According to a reporting partner in Hyesan, Ryanggang Province, the market exchange rate for one US dollar was 8,050 North Korean won, as of May 4. However, exchange rates at banks have fallen now by about 11%, with the US dollar now valued at 7,200 North Korean won. Previously, it was possible to exchange foreign currency for North Korean won at banks. Though bank rates were typically a bit worse than the rates offered at markets, this gap has now widened significantly.<\/p>\n

It is also said that the government\u2019s efforts to make trading companies convert their RMB and US dollars to North Korean won has led to widespread anxiety among ordinary residents. As they do not trust the North Korean won, most citizens, including the poor, try to save a small amount of foreign currency. However, there are now concerns that foreign currency may become too difficult to use.<\/p>\n

A reporting partner in Hyesan City said, \u201cAlthough no official orders have been given at workplace and Party meetings outlining a ban on the use of foreign currency, there are rumors spreading in Pyongyang that the \u2018use of foreign currency will be banned entirely in the future.\u2019 Official foreign currency vendors and other commercial institutions are offering much worse exchange rates than the markets.\u201d
\nNext page :Too afraid to use foreign currency at markets...<\/strong><\/p>\n

\u25c6 Too afraid to use foreign currency at markets<\/h2>\n

Meanwhile, due to the crackdown, the use of foreign currency at markets has now become much more difficult. The reporting partner explained, \u201cIt is now difficult to use foreign currency at markets. If you get caught with it, the money will be confiscated no matter what. Before, under the crackdown, officials and powerful people were forced to exchange their foreign currency for North Korean won. Now, however, there is no such forgiveness. The money is confiscated and returned to the bank. [The State Security authorities] refer to a new \u2018policy\u2019 and do not return the money.\u201d<\/p>\n

\u203b In North Korea, the term \u2018policy\u2019 refers to direct orders from Kim Jong-un.<\/p>\n

What is the motivation behind the North Korean authorities\u2019 strong intervention in the foreign currency market? As trade with China has been cut off since early January due to COVID-19 countermeasures, there have been few chances for North Koreans to spend their foreign currency. With that being the case, the authorities may be eyeing this moment as an opportunity to absorb foreign currency at an abnormally low exchange rate.<\/p>\n

According to reporting partners, a task force was set up by Kim Jong-un in November 2019 to lead a crackdown on the use of foreign currency. (The North Korean leader specifically ordered for North Korean won to be treated \u2018with more care\u2019). This crackdown is said to have now stepped up a gear. Before, those who were \u2018discovered\u2019 with foreign currency on them were punished. Now, however, the task force is fielding a higher number of undercover operatives to pretend to be buyers and sellers of foreign currency.<\/p>\n

\u25c6 Anxiety over the future leads to stockpiling<\/h2>\n

In North Hamkyung Province, Ryanggang Province, and even Pyongyang, hoarding of Chinese goods, rice, and corn has become common. The reporting partner explained the phenomenon thusly:<\/p>\n

\u201cPeople are pessimistic, believing that it will take quite a long time for trade to be normalized due to coronavirus causing deaths in the US, China, and rest of the world. Word is spreading that planes and ships have been stopped. Due to this anxiety, there are more and more people hoarding goods. Non-wealthy people used to buy just 1-2 kilograms of food at a time, to be eaten later the same day. Now, however, people buy as much as they possibly can.\u201d<\/p>\n

Although hoarding has become prevalent and stocks of rice are decreasing, food shortages are said to have not yet occurred at markets.<\/p>\n

As of May 4, the exchange rates and prices of goods in Hyesan City and in cities in North Hamkyung Province were as follows. Note: The value of the US dollar has fallen by 14% over the last month.<\/p>\n

1 RMB = 1,220 North Korean won
\n1 US dollar = 8,050 North Korean won
\n1 kg of corn = 1,900 North Korean won
\n1 kg of white rice = 4,500 North Korean won
\n1 kg of gasoline = 13,420 North Korean won
\n1 kg of diesel fuel = 9,760 North Korean won<\/p>\n

\u203b ASIAPRESS contacts its reporting partners in North Korea through smuggled Chinese mobile phones.<\/p>\n

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