Wealthy North Koreans and high-ranking regime officials in Pyongyang are quickly exchanging Chinese yuan they have acquired into much-coveted U.S. dollars or euros, because the two Western currencies are giving them a bigger bang for their buck, sources inside the country said.
U.S. dollars, euros, Japanese yen, and Chinese yuan have long lubricated the isolated country’s struggling economy, which has endured further blows from international sanctions imposed in 2017 and earlier this year to punish the regime for nuclear tests and missile launches under its illicit arms program.
The foreign notes offer currency stability and a means for the regime to enhance its coffers in a country whose native bills — North Korean won — are relatively worthless and only used by ordinary citizens for everyday transactions inside the country.
Though Chinese yuan has been the most readily available foreign currency brought in mainly by traders who live in areas bordering China, the use of yuan notes has fallen off considerably among the elite in North Korea’s capital.
“The use of Chinese yuan in Pyongyang has recently dropped,” a source who declined to be named told RFA’s Korean Service. “Most of the wealthy and high-ranking officials prefer U.S. dollars, euros, or Japanese yen. Chinese yuan is hardly seen.”
Chinese yuan began disappearing at the end of last year, though it is not certain whether the implementation of new and harsher sanctions is to blame, he said.
“But people began to avoid using Chinese yuan for any transactions,” the source said.
“A lot of Chinese yuan held by the rich and high-ranking officials in Pyongyang has already been exchanged into U.S. dollars or euros,” he said. “Those who use Chinese yuan are considered to be behind the times.”
The use of U.S. dollars has become common as if the U.S. dollar is North Korea’s own currency, and is especially increasing among high-ranking officials who give American bills as gift money to their families on holidays or other special occasions, the source said.
Most desired currency
A source from North Hamgyong province told RFA that on former leader Kim Jong Il’s birthday, known in North Korea as the Day of the Shining Star, and on Lunar New Year’s Day — both on Feb. 16 this year — people observed a considerable change in the use of foreign currency.
“Merchants from the cities near the border, influenced by Pyongyang residents, began exchanging Chinese currency for U.S. dollars,” he said.
The reason that U.S. dollars, euros, and Japanese yen are popular on the black market is because of the difference in their value, he said.
One U.S. dollar is worth 8,000-9,000 North Korean won, while one Chinese yuan is worth only 1,200 North Korean won, the source said.
“There is big difference in value,” he added.
U.S. dollars are in great demand, even though North Korea’s state-owned broadcaster Korean Central Broadcasting and the Rodong Sinmun, the official newspaper of the Korean Workers’ Party, has branded the United States as the North’s archenemy and has propagandized class struggle even more than before, the source said.
“Despite the propaganda, the U.S. dollar is becoming the most desired currency over the euro and Japanese yen,” he said.
The amount of U.S. dollars — the currency of the North Korean regime’s mortal enemy — that one possesses draws the line between the wealthy and the poor in Pyongyang, he said.
North Koreans inside the country typically earn less than a dollar a day paid in won in their official jobs, though they usually pull in extra income by working in local markets and performing labor.
“Though the authorities emphasize the destruction of anything that goes against socialism and decorum, rich people and high-ranking officials who possess U.S. dollars are showing off the power of the U.S. dollar,” the source said.
Reported by Jieun Kim for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Roseanne Gerin.