Tags: North | Korea | revaluation

Shock as North Korea Revalues at 100 to 1

Wednesday, 02 December 2009 10:13 AM

SEOUL — North Korea's shock currency revaluation has sparked anger and frustration in the isolated communist state as citizens see much of their savings wiped out, reports and observers said Wednesday.

They said the North had tightened security against possible agitation following Monday's redenomination, which has yet to be announced by official media.

Embassies in Pyongyang confirmed that North Koreans have been given a week to exchange 100 old won for one new won, destroying much of whatever they have managed to stash away in one of the world's poorest countries.

Analysts said the move appears aimed at curbing inflation and clamping down on burgeoning free markets in an attempt to reassert the regime's control.

South Korea's Chosun Ilbo newspaper said the main motivation "appears to be (leader) Kim Jong-Il's intention to throttle the emerging free market" before an eventual handover of power to his youngest son Jong-Un.

The regime has already taken steps to curb free markets, which sprang up after the state food distribution system collapsed during famines in the 1990s, but which are now seen as threatening its grip on power.

Chosun quoted other experts as saying the main aim is wealth redistribution.

Professor Nam Ju-Hong of Kyonggi University told the paper Kim has "declared war against market forces" with the drastic currency reform, because his efforts to control trade had failed.

Analysts said authorities initially limited the total sum that an individual can exchange for new currency to 100,000 won.

Because of widespread protests, the limit was raised to 150,000 won in cash and 300,000 won in bank savings, according to DailyNK, an online newspaper with informants in the North.

The official exchange rate is 135 won to the dollar but the current black market rate is between 2,000 and 3,000.

"Hardest hit were the emerging middle-class who had earned big wealth from the jangmadang (markets)," said Lee Seung-Yong of Good Friends, a Seoul welfare group with contacts in North Korea.

"They were angry and frustrated since most of their wealth based on the previous banknotes has been chipped away," he told AFP.

But Lee said he expects no organised protests given the state's tight control over society. He and other analysts believe the redenomination is aimed partly at reinforcing that control.

"The main goal is to crack down on the private markets that had stoked capitalism and to place socialism back in control," Lee said.

Good Friends said authorities were using loudspeakers installed in towns, farms and homes to spread news of the currency change, rather than official media.

It said major cities including the capital Pyongyang and Sinuiju on the border with China were quiet, with shops, public bathhouses and restaurants mostly closed and long-distance buses not operating.

The sudden revaluation angered market vendors and others.

"I worked like a dog for two months for the winter, but the money became useless paper overnight," Good Friends quoted a Sinuiju resident as saying.

DailyNK said security forces mounted extra street patrols and imposed a curfew in North Hamkyung province in the northeast.

"After 10:00 pm all movement is prohibited. Offenders must be strictly regulated," it quoted the curfew notice as saying.

All shops, markets and stores remained closed due to a temporary ban on trading during the week-long exchange of bills, it added.

DailyNK said one woman, tugging at her hair in anger, passed out at a market in the city of Hyesan on the China border.

"Kim Jong-Il must have wanted to bring the money out of the private safes and by doing so must have also hoped to ease public dissatisfaction resulting from growing social stratification," the Korea Herald said in an editorial.

"Yet, such a drastic measure amounts to confiscation and could backfire even under the ruthlessly controlled system of the North."

Copyright AFP


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SEOUL — North Korea's shock currency revaluation has sparked anger and frustration in the isolated communist state as citizens see much of their savings wiped out, reports and observers said Wednesday.They said the North had tightened security against possible agitation...
Wednesday, 02 December 2009 10:13 AM
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