North Korea’s exchange rates soar after restart of international freight train service
North Korea’s exchange rates have soared since the restart of China-North Korea freight rail service after a two-year hiatus. There is also a lot of confusion among North Korean traders as authorities have not issued any guidelines regarding the resumption of trade.
According to several sources at the Daily NK in North Korea, the dollar and yuan rates began to rise immediately after a North Korean freight train arrived in Dandong, China on January 16.
As of January 20, the North Korean won had climbed to 5,700 KPW against the dollar in Sinuiju.
Compared to January 11, when the rate stood at 4,700 KPW against the dollar, the greenback had strengthened by more than 20% in just nine days.
The price of the yuan also climbed. The yuan traded at 600 KPW on Jan. 11 but climbed to 700 KRW on Jan. 20 after the China-North Korea freight train service restarted.
The dollar rate held at 8,000 KPW and the yuan rate at 1,200 KPW even after North Korea closed the border in January 2020, but started to decline as demand for foreign currency waned with the extension of the border closure.
Recently, the dollar and yuan were trading around 4,000 KPW and 600 KPW respectively, about half the rate before the border was closed.
However, exchange rates immediately started to climb with the restart of freight train service with China, with the rate clearly increasing in major cities such as Pyongyang and Chongjin in North Hamgyong province.
Even in Chongjin, the greenback was trading at 5,570 KPW on January 20.
The rate is climbing at a similar pace in Pyongyang, but the dollar and yuan are trading at slightly lower prices than Sinuiju.
Daily NK understands that some traders are buying dollars and yuan in the hope that trade will expand after the restart of international freight train service.
However, the temporary nature of the restart of freight train service and the lack of guidance from trade authorities are amplifying confusion among provincial trade agencies and traders.
Some traders are buying foreign currency in expectation of trade expansion, but local trade officials in Yanggang province, the two Hamgyong provinces and elsewhere are delaying.
A trader from Yanggang province said that while the trade restart was limited to Sinuiju, traders from Yanggang province and the two provinces of Hamgyong had little to do. He added that although some people feel that they should buy dollars or yuan now, he personally doubts that it is worth stocking up on foreign currency because he is not sure if he can participate in a renewed trade.
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