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Date : August 29, 2012
Jang's Visit to China and the Skyrocketing Exchange Rate
   http://www.nkradio.org/news/9731  [746]
After Jang Sung Taek's visit to China, the exchange rate in Hyesan and Chungjin increased up to 1,050 won. It has been ten days since Jang came back from China, but, according to a source in North Korea, the economy has not gotten better, and the exchange rate for 1 Chinese yuan has risen up to around 1,000 North Korean won.
 
According to the source from the North Korean Foreign Ministry, since Kim Jong Eun's New Economy Management System was introduced, many people have hoarded Chinese money in every region, and the exchange rate increased to 900 won for 1 yuan. However, Jang's recent visit to China has increased the rate up to 1,050 won for 1 yuan which is the highest it has ever been.
 
The source stated, "North Koreans who heard about Jang's visit to China expected some epochal changes, but when they saw no result, they were disappointed and thought that all they can believe in is the possession of Chinese money, and that is the reason for the skyrocketing of the exchange rate."
 
The source also said that, to control this situation, the North Korean government has strengthened the regulations against money hoarding; however, even the high executive members, who are in charge of this regulation, are hoarding Chinese money, so the control for this is not really effective.
 
The skyrocketing of the exchange rate has directly affected the black market. As the exchange rate increased, merchants raised prices, and, as prices increased, consumers waited for the prices to decrease and delayed buying. Since the black market has experienced a downturn, the source said that many traders with China keep adjusting their product orders.
 
As a result of these conditions, the number of food merchants, who stopped selling, is increasing. Since they cannot predict the exchange rate, they cannot sell products right away. Because of this, the price of 1kg of rice has become more than 7,000 won.
 
However, the situation for farmers and the poor is much harder. They rarely have Chinese currency, and they usually exchange their agricultural products with market products such as rice. But, since the price of rice has increased, they need more agricultural products to exchange. In North Korea, farms are owned by the government, so farmers and the poor usually cultivate their own food in a separate patch. Thus, they are directly affected by the skyrocketing of the exchange rate, and it makes their lives much tougher.
 
The source said, "Jang Sung Taek's recent visit to China did not bring the change to an open economy. Instead, his visit was a piece of typical propaganda from the North Korean government." Also, many North Koreans criticized the visit of Jang Sung Taek as showing off that he is the real power of North Korea, and that he only brought economic confusion. 

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