North Korea Values Chinese Renminbi at Par with the U.S. Dollar

Dec. 10 – In the aftermath of its currency devaluation, the North Korean regime has apparently pegged the won at 131 won to the U.S. dollar and 139 won to the Chinese renminbi, effectively placing the renminbi and the U.S. dollar at parity. Although not officially confirmed, data received from North Korea suggests this may be the case.

The regime devalued its currency ten days ago creating enormous disparities between actual value and black market rate. The North Korean won black market value to the U.S. dollar is about 3,000 to 1.

Although the decision appears rash, it may be the result of turmoil that exists within North Korea at this time. When buying black market goods U.S. dollars are still used in hard cash as well as rubles and renminbi.

However, the United States has made it increasingly difficult for North Korea to trade in U.S. dollars partly because of trade embargos due to the nuclear standoff and suspicions of money laundering and counterfeiting of U.S. dollar banknotes.

Some trading boards still show the previous official trading rate of 900 won to the dollar, and further developments are likely as the North Korean Central Bank tries to both stabilize its currency and deal with the decision to benchmark the currency based on state policy and not trade.