N. Korea's new currency plummets against Chinese yuan: report

SEOUL, Jan. 3 (Yonhap) -- North Korea's new currency introduced in late November
has plummeted in value compared to the Chinese yuan, a local radio broadcaster
claimed Sunday.

The Seoul-based Open Radio for North Korea (ORNK), citing unidentified sources
along the Sino-North Korean border, said that merchants were exchanging one yuan
for 1,000 new North Korean won as of late last month, plummeting from the 50 won
traded for every yuan on Dec. 3, right after Pyongyang introduced the new
currency.
Under the move, the communist country knocked two zeros off its currency without
warning on Nov. 30 in the first such value adjustment since 1959.
The radio, which aims to inform North Koreans on events happening in the outside
world, said the value of the new North Korean currency fell to 520 won to the
yuan by the middle of last month, indicating a steady depreciation throughout the
month.
Before the currency reform took place, 1 yuan was worth around 588 old won, which
is equivalent to 5.88 new won.
The ORNK speculated that the reason for the new currency's weakness may be
Pyongyang's decision to not allow foreign currency to circulate in the market.
"The official proclamation to ban foreign currency use was made on Dec. 28, but
there have been rumors circulating after the currency reform took place, causing
the new won to depreciate against Chinese money," the radio station report said.
It said that with Pyongyang unlikely to allow the use of foreign money as a
medium of exchange or to bolster its new currency, it may be hard to determine
when the value of the new won will stop falling.
North Korean media reported early last month that authorities were introducing
new money to curb the mushrooming free market and raise the value of the
country's legal tender.
There have been unconfirmed reports that the currency reform has drawn resistance
from ordinary citizens and merchants, whose savings have been drastically cut by
the unannounced measures.
(END)