N. Korea’s foreign currency exchange rates continue to rise

Foreign exchange rates continue to rise in North Korean markets. The exchange rate of the North Korean won to the US dollar has reached a new high, while the won-yuan rate has remained stable.

According to Daily NK’s regular survey of prices at North Korean markets, the dollar was trading at KPW 8,850 at a marketplace in Pyongyang on May 12. The rate was up KPW 150 in two weeks, since the previous survey on Apr. 28 (KPW 8,700).

Daily NK’s survey found that the won-dollar exchange rates in Sinuiju, North Pyongan Province, and in Hyesan, Yanggang Province, were at a similar level to the Pyongyang rate.

The current won-dollar exchange rate in North Korean markets is at its highest point in the past ten years.

The dollar was trading at KPW 8,400 at a market in Pyongyang shortly before North Korea closed the national border because of COVID-19 in January 2020. Subsequent restrictions on trade suppressed demand for the dollar, pushing the won-dollar rate below KPW 4,700 at markets in 2021.

By the second half of 2022, the market price of the dollar had returned to its pre-pandemic level of KPW 8,000-8,500, where it remained for some time. But in February of this year, both the dollar and the yuan began to appreciate significantly. This was shortly after the “20×10 regional development policy” was announced at a meeting of the Supreme People’s Assembly in late January.

The dollar’s current rate of appreciation at North Korean marketplaces appears to be higher than in the international market.

The U.S. Dollar Index, which measures the value of the dollar relative to a basket of six major currencies, rose 2.8% between Jan. 5 and May 10, from 102.41 to 105.3. In comparison, the won-dollar exchange rate at a market in Pyongyang rose from KPW 8,300 to KPW 8,850, or 6.62%, between Jan. 7 and May 12.

In other words, the dollar’s value at North Korean markets since January rose more than twice as much as the U.S. Dollar Index in the same period.

The rise of the yuan slows

The survey also found that the yuan’s steep appreciation against the won at North Korean markets has slowed somewhat. The yuan was trading for KPW 1,750 at a Pyongyang market on May 12, which was KPW 10 higher than on Apr. 28 (KPW 1,740). However, the won-yuan rate declined slightly in the Sinuiju and Hyesan markets.

The average won-yuan exchange rate at markets in the three cities (Pyongyang, Sinuiju and Hyesan) has remained in the KPW 1,700-1,799 range for a month now, since mid-April. This April was the first time the rate has reached KPW 1,700 since Daily NK began tracking the rate at North Korean markets in 2015.

As the exchange rate continues to rise in North Korea, the prices of not only gasoline and diesel, but also imported food products such as cooking oil, sugar, and wheat, have continued to rise.

On May 12, a kilogram of gasoline at a market in Hyesan shot up to KPW 15,600 and a kilogram of diesel to KPW 14,300. The rise in the price of gasoline and diesel appears to have been accelerated by the transplanting of rice seedlings that has recently begun on farms throughout North Korea.

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