＜Inside N. Korea＞ Won Plunges After Regime Attempts to Confiscate Foreign Cash off Merchants and Force Companies to Trade in Local Currency

◆ Foreign currency seized at markets

North Korean authorities began cracking down on the use of U.S. dollars and the RMB towards the end of last year.

On January 22, a reporting partner in Hyesan City said, “As soon as Kim Jong-un’s ‘words of criticism’ were released in November of last year, police officers began patrolling the markets in plain clothes. They recently created a separate ‘foreign currency control team’ which employs disguises for catching those using foreign currency and confiscates their cash without mercy.”

Kim Jong-un’s “words of criticism” lamented the fact that “we treat foreign money with great care, but neglect our own country’s money.” This critique came after banknotes collected by the central bank were found to be in a dilapidated state, often in tatters. Following this message, full-scale efforts were initiated to control the use of foreign currency.

Merchants are now forced to use domestic currency at markets. When business hours are over, the merchants convert their earnings immediately at black market exchanges. Merchants are also said to be secretly using RMB for wholesale purchases outside of markets or for deals conducted at home. The reason for this is that they do not trust the national currency.

◆ Trade companies also banned from using foreign currency

This is not just the case at markets. According to another reporting partner in Ryanggang Province, the authorities have recently taken steps to ban the use of foreign currency in domestic transactions by trading companies. When purchasing medicinal herbs from local residents to be exported or smuggled to China, trading companies are now careful to use only North Korean won.

By mid-January, it was said that various trade companies were displaying strange trends. To abide by the new policy, companies were having to actively convert RMB into large quantities of North Korean won or vice-versa.

A reporting partner in Hyesan City said, “There were rumors that a trade company official was seen carrying hundreds of millions of North Korean won in cash to a currency exchange dealer by taxi. These rumors spread a lot of anxiety.”

Regarding future expectations, the reporting partner said, “As always, things are quite strict following a ‘policy’ announcement by Kim Jong-un. But soon things will blow over. Many merchants will get off through bribery or personal connections if authorities try to confiscate their foreign currency. Only those who can’t afford the bribes will have their money confiscated. Kim Jong-un’s ‘policy’ will only bring money to the pockets of law enforcement.”

It remains to be seen if the North Korean won’s fall will be temporary or if the currency will collapse further and lead to inflation. Future movements will be tracked. (Kang Ji-won / ISHIMARU Jiro)

※ ASIAPRESS contacts reporting partners in North Korea through smuggled Chinese mobile phones.

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