As of early January, most commodity prices in North Korean markets have roughly doubled compared to the same period last year, while the North Korean won-to-dollar exchange rate has nearly tripled over the past year. Reactions among residents vary significantly depending on their income levels according to a recent report by Daily NK.
A survey conducted by Daily NK, which regularly monitors North Korean market prices, showed that as of January 5, the won-to-dollar exchange rate in Pyongyang was 22,100 won per dollar.
This represents a sharp increase from 18,000 won in early November and shows that the exchange rate has remained strong into the new year after surpassing the 20,000-won mark in December.
In 2020, North Korean leader Kim Jong-un inspected rice grains during his visit to a flood recovery site in Kimhwa County, Gangwon Province. [YONHAP]
Similar exchange rates were reported in major cities such as Sinuiju in North Pyongan Province and Hyesan in Yanggang Province, indicating that the trend is consistent across the country.
In early January 2023, the exchange rate in Pyongyang was 8,300 won per dollar, meaning that the current rate reflects a 166.3% increase year-over-year. According to past market data, such a rapid increase in the exchange rate over a one-year period is unprecedented since the 2009 currency reform.
The won-to-yuan exchange rate has also more than doubled over the past year, though the increase has been less steep than that of the dollar. On January 5, the exchange rate in Pyongyang was 3,200 won per yuan, a slight rise from 3,150 won on December 22. Compared to the 1,250 won per yuan recorded in early January 2023, the rate has surged by 156%.
With the sharp rise in foreign exchange rates, the prices of imported goods in North Korean markets have also nearly doubled. As of January 5, gasoline and diesel were being sold at 24,400 won and 21,300 won per kilogram, respectively, in a Pyongyang market. These prices represent increases of 92.1% and 88.5% compared to 12,700 won and 11,300 won a year ago.
Prices of staple imported food items such as cooking oil and sugar have also risen significantly, increasing by 85% and 97.9%, respectively, over the past year.
While the prices of imported goods have seen steep rises, the increase in staple food prices, such as rice and corn, has been relatively lower. On January 5, rice was being sold at 8,500 won per kilogram in a Pyongyang market, up 76% from 4,820 won in early January 2023.
The price of corn, however, showed a higher increase. Corn was being sold at 4,200 won per kilogram, representing an 86% rise from 2,260 won a year ago.
The dramatic rise in market prices has elicited mixed reactions from North Korean residents. Economically vulnerable groups, including low-ranking workers and those with limited market income, are reportedly facing severe livelihood threats due to the inflation.
Multiple local sources reported that some households are switching from rice to corn as their main staple and are reducing meal portions to cope with the rising costs. In rural areas, there is a growing number of “zero-food households”—families who have completely run out of food supplies.
BY YOUNGNAM KIM [kim.youngnam@koreadaily.com]
