Recent developments indicate that North Korea is enhancing its official currency exchange services by incorporating a broader spectrum of foreign currencies. This move aims to strengthen and diversify trade relations beyond the traditionally handled dollar and yuan. The inclusion of yen, euros, and rubles reflects Pyongyang's strategic approach to international commerce. A source from Pyongyang highlights the growing frequency of transactions involving these new currencies, particularly noting an increased demand for Japanese yen due to the influx of Japanese products through China. Similarly, the demand for euros has risen in tandem with imports of European luxury goods, while the ruble remains less favored due to limited trade ties with Russia.
In response to evolving trade dynamics, North Korea’s official exchange offices have started handling multiple foreign currencies, including Japanese yen, euros, and Russian rubles. According to a local source, these exchanges are increasingly common in central districts of Pyongyang. Notably, there has been a significant rise in the exchange of Japanese yen, attributed to the growing availability of Japanese products entering the country indirectly via China. These products range from electronics to used cars, indicating a shift in consumer preferences and trade patterns.
Beyond yen, the demand for euros has also surged as imports of high-end European goods such as automobiles, furniture, and luxury items have increased. Despite this trend, the demand for rubles remains relatively low, primarily because most transactions between North Korea and Russia are settled in dollars or conducted through barter trade. Some exchange offices even refrain from handling rubles altogether due to minimal demand compared to other currencies.
To ensure transparency and encourage the use of official channels, North Korean authorities continue to issue daily floating exchange rates through State Foreign Exchange Service offices and Cooperative Currency Exchanges nationwide. Although these rates aim to align closely with market conditions, discrepancies still exist between official and informal market rates. For instance, on December 19th, the official exchange rate in Pyongyang's Jung District was reported at 18,200 North Korean won per dollar, whereas market rates were significantly higher at 21,000 won per dollar. Similar gaps were observed for other currencies, leading individuals to prefer private money changers who offer better rates.
Despite the government's efforts to standardize exchange rates across different regions, variations persist due to local economic conditions and foreign currency reserves. For example, in Kangdong County, where coal production plays a crucial role, the demand for dollars and yuan fluctuates based on export activities, influencing regional exchange rates. While authorities strive to minimize the gap between official and market rates, the preference for private exchanges continues, reflecting underlying trust issues and the need for more competitive official offerings.
The integration of additional foreign currencies into North Korea's official exchange system underscores the nation's commitment to expanding its trade horizons. By accommodating diverse currencies, Pyongyang not only enhances its economic resilience but also signals its willingness to engage with a wider array of global partners. However, challenges remain in bridging the gap between official and market rates, ensuring equitable access to foreign currencies, and fostering public confidence in state-run financial institutions.