Nearly a month after North Korea redenominated its currency at a rate of 100 to 1 (read North Korea changes currency and rates 100 to 1), North Korea changes currency and rates 100 to 1), its international value has also begun to plunge.
Reports from South Korea’s Yonhap news agency this week stated the new North Korean currency was trading in neighboring China at a rate of 1,000 won for 1 yuan (the Chinese currency).
Shortly after the currency shift in early December, Chinese trade rates were steady around 50 to 1. Since then, the value of North Korean won has been rapidly depreciating.
The government of North Korea cited the country’s decade-plus run of economic hardship and increasing evidence of runaway inflation as their reason for redenomination, though many critics agree it was a direct attack on emerging private markets.
Citizens were only given one week to exchange their old currency for new currency in December, and were only permitted to exchange 150,000 won regardless of how much won they owned or had saved.
On New Year’s Day, North Korea banned the use of any international currency within its borders.