North Korean Won

Overview

The North Korean Won is is the official currency of North Korea, which occupies the northern half of the Korean Peninsula. Its capital and largest city is Pyongyang. The Korean Demilitarized Zone serves as the buffer zone between North Korea and South Korea. The Amnok, or Yalu, and the Tumen rivers form the border between North Korea and China.

Economy

• North Korea is an industrialized, almost self-sufficient, highly-centralized economy. Of the five remaining communist countries in the world, North Korea is one of the two (along with Cuba) with an almost entirely government-planned, state-owned economy.
• The Central Planning Committee develops, monitors, and executes business plans, while Provincial Departments of Industry in each region are responsible for the management of local manufacturing facilities, production, resource allocation, and sales.
• Food rations, housing, health, and education are free, and taxes were abolished on April 1, 1974.
• In order to increase productivity in agriculture and industry, the government has introduced a range of management systems, such as the Taean work system.
• Since 2000, the growth of North Korea’s GDP has been slow but steady. By 2008 growth had accelerated to 3.7%, the fastest pace in almost a decade, largely due to strong growth of 8.2% in the agricultural sector.

History

• The North Korean Won became the currency of North Korea on December 6, 1947, replacing the Korean Yen.
• North Korean Won are intended exclusively for North Korean citizens, and the Bank of Trade issued a separate currency for visitors, as did many other socialist states. However, North Korea made two varieties of foreign exchange certificates: one for visitors from socialist countries, which were colored red, and one for visitors from capitalist countries, which were colored blue/green. In recent times, FECs have been largely depreciated in favor of visitors paying directly with hard currency, especially Euros.
• Since 2001, the North Korean government has abandoned the iconic rate of 2.16 Won to the US Dollar (which is said to have been based upon Kim Jong-il's birthday, February 16) and banks in the country now issue at rates closer to the black market rate.
• More recent official rates (as of August 24, 2010) have shown the North Korean Won to be valued at 143.07 to the US Dollar. However, rampant inflation has been eroding the North Korean Won's value to such an extent that it is now thought to be worth about the same as the South Korean Won.
• In June, 2009, a report by defectors from North Korea claimed that the black market rate was 570 Won to the Chinese Yuan Renminbi. In any case, the U.S. dollar and other currencies are still worth more in North Korean Won on the black market than officially.