North Korea’s “crazy” foreign exchange fluctuations herald Kim Jong-un facing new risks


As the economic pressure from the Covid-19 pandemic and international sanctions has brought new risks to Kim Jong Un, North Korea has been hit by sharp fluctuations in currency and food prices.

Volatility will exacerbate the plight of many of North Korea’s 25 million people.It may also disrupt the country’s unofficial market trading system, known as Jiang Madang, And increase instability.

According to Daily NK, a website that tracks the North Korean market, since the beginning of the pandemic, the North Korean won has appreciated by 30% and 40% against the U.S. dollar and the Chinese yuan, respectively.

“There is real price inflation in the market at the moment, which is very scary. At the same time, fuel prices have risen sharply, and foreign exchange prices-the U.S. dollar and the renminbi against the Korean won-have plummeted,” said Peter Ward, an expert on North Korea at the University of Vienna.

Pyongyang mainly has Isolate this country Foreign trade and aid since the outbreak of the coronavirus crisis due to concerns about the impact of the uncontrolled spread of the virus.Typhoon disasters intensified last year economic pressure.

Experts attribute currency to Foreign exchange changes The collapse of trade combined with the country’s efforts to remove foreign currency from domestic circulation.

William Brown, a former US intelligence officer who leads the Northeast Asia Economic and Intelligence Consulting Company, said that currency stability has always been Signs of King’s ruleAfter experiencing inflation and currency devaluation during the reign of his father Kim Jong Il, this boosted market development.

“Severe fluctuations” may increase the despair of the people in this country, Brown wrote 38 North, a project operated by the Stimson Center, an American think tank. “At some point, even now, inflation may seem to him to be a bigger enemy of stability… than the United States,” he added.

Go Myong-hyun, a North Korean economic expert at the Asan Policy Research Institute, a think tank in Seoul, pointed out that Kim has ordered the country to reduce its dependence on imported “disease”, which is in line with the recent centralized control of the economy and Squeeze the national elite.

“The North Korean system will avoid a recurrence of the famine of the 1990s. The bigger story here is the North Korean regime’s efforts to suppress the market system… It is obvious to me that it is pursuing Jiang Madang,” He says.

The Kim regime is also turning to its Hacker army Experts say to raise cash.

Yana Blachman, a former Israeli intelligence officer who works for the cybersecurity organization Venafi, said that the proceeds of cybercrime should be regarded as the main means of generating income. In recent years, North Korean cybercriminals have netted billions of dollars through cybercrime activities. A wide range of solutions For banks and other financial-related institutions, including peer-to-peer lenders and cryptocurrency exchanges.

She said: “There are many attacks that have not been reported, especially in smaller, unnoticed attacks such as ransomware and cryptocurrency.”

North Koreans are keenly feeling economic problems, and many of them are already suffering Food insecurityAccording to defectors who have kept in touch with contacts in the country.

Seoul defector Kang Chol-hwan said that the prices of food and basic commodities have soared 3 to 10 times.

“It feels like the Kim regime is slowly paralyzing,” he said.

Another fugitive, Seo Jae-pyeong, said that despite earlier signs that the level of food aid from China appears to be declining. Increase shipments.

“Asking how many meals people have eaten is not the right question,” Xu said. “The question should be whether the soup is thin or thick.”



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About the Author: Agnes Zang