Advertisement

Currency reform fuels inflation

PYONGYANG, North Korea, Jan. 8 (UPI) -- North Korea's recent currency reform appears to have stumbled as the country has been hit by rising inflation and food shortages, analysts said.

The currency reform of last year, which bars the use of foreign currency, was part of North Korean leader Kim Jong Il's effort against free markets, The Washington Post reported.

Advertisement

Kim and his officials were angered the markets, aided by strong growth, had come to replace the government as a source of employment and a channel for food distribution.

Under the currency reform announced without notice, the won was revalued while the government severely restricted the swapping of the old won for new. The rules were later eased under public protest.

The measures to crack down on those bringing goods from China even included controls on travels to border areas, punishment for illegal border crossing and a stopping people from carrying large suitcases.

However, the measure only resulted in traders pulling their goods off markets, causing prices and inflation to rise while creating shortages.

Quoting Good Friends, an aid agency in the South Korean capital of Seoul with informants in the North, the Post reported some of the wholesale markets have either been closed or ordered closed, further aggravating the problem.

Advertisement

Latest Headlines

Advertisement
Advertisement

Follow Us

Advertisement