North said to have revalued currency

Park Sang-hak, a North Korean defector and an anti-North Korea activist living in the South, holds North Korean 5,000 won banknotes during an interview with Reuters in Seoul yesterday. [REUTERS]

A South Korean news outlet said yesterday that the North has raised the value of its currency in the first such move in 17 years, and a Western diplomat in Seoul confirmed the action.

But the South Korean government and intelligence officials couldn’t verify the report by press time last night.

The Daily NK, a Seoul-based online North Korean news outlet, said several sources in China and North Korea reported that the North Korean central bank revalued and replaced its national currency Monday.

Xinhua News Agency in China also reported yesterday that North Korea has informed its overseas embassies that the old North Korean currency would no longer be used as of Nov. 30.

Quoting a North Korean Foreign Ministry official, Xinhua’s report said the old bills would be exchanged for new ones between Nov. 30 and Dec. 6.

According to the Daily NK, a source in Pyongyang told the outlet that the central bank began exchanging old bills for new ones at the exchange rate of 100 to 1. In other words, old 1,000 won bills were being exchanged for new 10 won bills.

In the North Korean currency, there are one, five, 10, 50, 100, 200, 500, 1,000 and 5,000 won bills, and coins for 10 and 50 won and 1 jeon, or a hundredth of a won.

According to the Pyongyang-based source, the government’s decision was aimed at curbing inflation. The source noted that since the North last took economic reform measures on July 1, 2002, prices have soared.

“Since Chosun [North Korean] money has lost its value, the authorities have undertaken this currency reform,” the source said.

Another source in North Hamgyong Province said the news of the revaluation sent “huge shockwaves” throughout the North Korean public, and that North Koreans were busy trying to buy dollars or Chinese yuan.

Then a Seoul-based foreign diplomat said he received a report from his country’s embassy in Pyongyang Monday that the currency revaluation was under way. The source said: “We confirmed today that this was true.”

The South Korean government, however, couldn’t confirm the move. At a press briefing in the morning, Unification Ministry spokesman Chun Hae-sung said the ministry and related agencies were still trying to verify the report.

Chun noted that there had been no official North Korean media reports about the currency reform. By press time last night, the state-run Korean Central News Agency had not carried any statement, and the Rodong Sinmun, the mouthpiece for the ruling Workers’ Party, had no related articles in its latest edition.

According to the Unification Ministry, North Korea has undergone currency reforms on four occasions since its government was founded in 1947. The first one was in December 1947, and the next took place in February 1959. The third reform came 20 years later and the last one was in July 1992.

There were no adjustments to denomination values in 1947, 1979 and 1992, and old bills were simply exchanged for new ones. In 1959, the exchange rate was revalued by 100 to 1. Following each of the past three reforms, the North announced the move in the Rodong Sinmun on the same day they were made, Chun said.

By Yoo Jee-ho [jeeho@joongang.co.kr]