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North Korea Currency 

 

 

Today marks the second anniversary of the shock November 30th, 2009 North Korean currency redenomination.

It was an event which left a lasting legacy for the North Korean regime; rendering the country further beset by currency instability, driving inflation and price rises, and instilling wariness and resentment in those dispossessed of their property, all despite the speed with which most of its tenets were cast aside and the slow but steady march of capitalism returned to center stage.

Commemorating the event better than any date, last month saw the price of goods and Chinese currency in the market reach new highs, with domestically produced North Korean rice rising above 4,000won/kg and the Chinese Yuan hitting roughly 720won.

At 2,200won, rice was already considered prohibitively expensive just before the redenomination in late 2009, and as such the redenomination itself, with its attendant arbitrary re-pricing of goods by the state, did indeed lead to a brief period of relief for the people. This can be seen most clearly in the 2011 Daily NK publication ‘NK People Speak, 2011’, wherein interviewee after interviewee noted that at the time it felt as if communism had finally arrived…

But in the end it came to nothing, as it was assumed by most observers that it would. By April, 2010 rice had risen from the state price of 23won/kg to 400won, by July it was 900won, and by this August had reached 2,000won, thus returning to the same nominal price it had been on November 29th, 2009, but in a new currency which had been, lest we forget, redenominated at 100:1.

Looking back on two years of economic upheaval yesterday, Yoon Deok Ryong of the Korean Institute for International Economic Policy commented, “North Korea’s currency redenomination gave birth to currency shortages and resulted in a recession.”

Thus, Yoon believes that the reform of North Korea’s financial system and revitalization of commercial banking are among the most critical tasks facing North Korea today, but since “North Korea’s current priorities are not economic,” this is not likely to occur.

It is something which presents North Korea with a problem, however, since, as Yoon said, “Economic revitalization can allow for political objectives, but in the end, a weak economy makes political objectives very difficult.”
 
 
FreeNK-Songju KIM Journalist
[Source=DailyNK]