North Korea Raises Currency Value in First Move in 17 Years

North Korea has made a bold move to tackle inflation and clamp down on black market trading by sharply raising the value of its currency, sources said. The reform, implemented on Monday, replaced the old denomination of 1,000 won with the new 10 won, with an exchange rate of 100 to 1. The drastic revaluation has caused confusion among citizens in Pyongyang, with many rushing to exchange their hidden assets on the black market. The move is seen as part of North Korea's nationwide campaign to rebuild its economy by 2012, the birth centennial of its founder, Kim Il-sung.

Key Takeaways:

• North Korea implemented a currency reform on Monday, replacing the old 1,000 won with the new 10 won at an exchange rate of 100 to 1.
• The reform is the first in 17 years, and the fourth time the country has undertaken a 1 to 1 currency exchange since its founding in 1947.
• The move is aimed at tackling inflation and drawing out money hidden in the underground economy.
• The revaluation has caused confusion among citizens in Pyongyang, with many rushing to exchange their hidden assets on the black market.
• The decline of the local currency value since 2002's economic reforms is seen as a contributing factor to the current economic situation.
• North Korea's economic reforms, initiated in 2002, aimed to make payments and prices more realistic and introduce market freedom.

Statistics:

• 100 to 1: the exchange rate for the new currency.
• 1,000 won: the old denomination replaced by the new 10 won.
• 1992: the last time North Korea implemented a currency reform.
• 2002: the year North Korea initiated economic reforms to make payments and prices more realistic and introduce market freedom.
• 2012: the target year for North Korea's nationwide campaign to rebuild its economy.

Sources:

• Yonhap News Agency
• Unification Ministry
• Asia Pulse
• Local sources in North Korea (speaking on strict condition of anonymity)