North Korea’s currency plunged sharply after Kim Jong Un visited China, sparking optimism about Chinese investments across multiple sectors. Markets reacted immediately, with the won-dollar and won-yuan exchange rates dropping dramatically. Traders and residents adjusted their holdings to reflect the new market expectations, signaling a major shift in currency trends.
In Pyongyang, the won-dollar rate fell from 43,400 won to 31,000 won in a short period. Other cities, including Sinuiju and Hyesan, reported similar declines. The won-yuan exchange rate also dropped significantly, falling more than 22 percent in major trading hubs. Analysts called this the largest short-term currency movement since the COVID-19 pandemic disrupted markets.
Market participants linked the sudden drop to expectations of increased Chinese capital inflows. Reports circulated that Chinese companies plan to invest in sectors such as construction, tourism, and mining. North Korean trading companies and customs offices confirmed that information reached money changers nationwide. Consequently, many traders sold foreign currency at high rates, anticipating gains from the market shift.
Some sources indicate that Chinese companies have already submitted investment proposals, including joint ventures. While exact investment details remain unconfirmed, traders believe Chinese currency inflows could arrive soon. Residents in major cities such as Pyongyang and Sinuiju increased activity, converting dollars and yuan into domestic currency through electronic wallets and “Jonsong” cards.
Choi Ji-young, a research fellow at the Korea Institute for National Unification, explained that psychological factors influenced previous currency spikes. Anxiety about domestic currency devaluation and hoarding drove the surge. After Kim’s China visit, these concerns eased, contributing to the rapid decline in foreign currency rates. However, she warned that speculative demand still affects North Korea currency, and fluctuations may continue.
Despite the falling exchange rates, domestic food prices showed mixed trends. Rice prices in Pyongyang rose by 7.1 percent, reaching 25,700 won per kilogram. Corn prices remained stable at 7,000 won per kilogram, slightly down from previous surveys. Analysts noted that it remains uncertain whether declining exchange rates will impact broader domestic goods prices.
Overall, the North Korea currency experienced a significant correction following Kim Jong Un’s visit to China. Investors and citizens are closely monitoring developments, while speculative trading continues to influence the market. The situation underscores the sensitivity of North Korea’s financial system to political and international developments.
