Saturday, December 5, 2009

SEOUL | North Koreans set piles of old bills afire in anger over their government’s surprise move to redenominate the national currency, a report said, a sign of growing frustration among citizens left with hoards of worthless bills.

On Monday, the communist government informed citizens and foreign embassies that it would redenominate the national currency, the won. But it limited the maximum amount of old bills that could be converted into new ones, telling residents to deposit the rest in government-run banks, according to media reports and diplomats.

There are widespread doubts among North Koreans as to whether they would be able to get their money back, they said.

Angry citizens burned piles of old bills at two separate locations in the eastern coastal city of Hamhung on Monday, the Daily NK, a Seoul-based online news outlet that focuses on North Korean affairs, reported late Thursday, citing an unidentified North Korean resident.

It quoted the resident as saying he saw graffiti and leaflets criticizing North Korean leader Kim Jong-il in and around a college in Hamhung - a rare move in a country where the totalitarian government keeps tight control over its 24 million people.

However, a Tokyo-based newspaper considered a mouthpiece for the North’s government claimed Friday that North Koreans were praising the currency reform.

The Choson Sinbo cited the North’s central bank as saying the reform was aimed at boosting the country as a “socialist economic power.”

The new highest-denominated bill of 5,000 won features a portrait of North Korean founder Kim Il-sung, Kim Jong-il’s late father, a photo published in the newspaper showed.

North Korea set the exchange rate at 100 old won to 1 new won. Initially, residents were only allowed to exchange 100,000 won per household for the new currency. But the government later increased the amount, allowing each family member to trade an additional 50,000 old won for new ones, according media reports.

The North Korean won was previously officially traded at 145 to the dollar, but more than 3,000 were needed to buy $1 on the black market, according to Dong Yong-sueng, a senior fellow at Samsung Economic Research Institute in Seoul.

The overhaul of the won - the most drastic in 50 years - appears aimed at curbing runaway inflation and clamping down on street markets that have sprung up. The government is also retaking control of the economy from the hands of merchants, analysts say.

Unable to feed its people, the government began allowing some markets in 2002, including farmers’ markets.

The markets have encouraged trade but have also sold banned goods such as movies and soap operas from rival South Korea, posing a threat to Mr. Kim’s totalitarian rule, analysts say. The country’s largest wholesale market in Pyongyang was reportedly shut down in mid-June.

The sudden redenomination sparked panic and despair among North Koreans, leading to the death of a man in a dispute over whether he should repay his debt in old bills or new ones. A merchant couple in their 60s also killed themselves in North Hamgyong province after hearing of the currency revaluation, according to the Daily NK.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2021 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide