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North Koreans burn bills over currency reform

SEOUL -- North Koreans set piles of old bills alight 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 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's rare move in a country where the totalitarian government keeps tight control over its 24 million people.

North Korea announced that the exchange rate would be set 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.

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 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.

South Korean online media outlets specializing in North Korean affairs have reported the currency reform by citing North Korean residents.

Despite crackdowns, some North Koreans are able to use cell phones through Chinese communication networks to communicate with the outside world, mostly with South Koreans and Chinese, according to North Korean defectors who have resettled in South Korea.

1 Comment
December 7, 2009    veryprocanadian@
Goes to show what the North Koreans will do (their government, i.e.) at the expense of their people. And they don't really know what they're doing. Someone never told Kim that devaluing the currency doesn't work if you don't fix the problems behind the inflation. So, people will have their savings wiped out because their money will be declared worthless and/or they'll be left with old scrip that can't be traded. I wish China would put more pressure on those jokers across the Tumen...
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