North Korea has closed down all shops and restaurant dealing in foreign currencies following a sudden money reform, a news report said Saturday. The Joongang daily also quoted a North Korean businessman engaged in trade with China as saying that people are buying necessities to spend their old money before the deadline Sunday.
North Korea on Monday sharply revalued its currency for the first time in 17 years in an apparent attempt to curb inflation and clamp down on black-market trading. The revaluation saw 100 won replaced by one new won. "All shops and restaurants accepting foreign exchanges were closed," the businessman was quoted as telling the daily in China's north-eastern city of Dandong near the border with North Korea.
"People in Pyongyang are stocking up like mad on necessities," he said. One kilo of rice which used to fetch 1,700 won in the old won surged to 15,000 won as North Koreans scrambled to get rid of their old won. "Local officials were going around knocking on every door, urging people to exchange for new currency before Sunday," he said.
A senior official of the communist state's central bank told a pro-Pyongyang newspaper published in Japan that all shops and restaurants in the North will be banned from accepting foreign currencies. The official, Jo Song-Hyon, told the Joson Sinbo that North Koreans were given until Sunday to change their old money into new currency at a rate of 100 old won to one won.
"Old banknotes which fail to be exchanged into new ones in the given period will become automatically null and void, as well as banknotes which have been illegally diverted abroad," he said. Shops and restaurants serving foreigners and Koreans living abroad will also accept only new money, departing from their old practices of accepting foreign exchanges including dollars, yen or euros, he added.
Individuals were initially allowed to exchange for new currency up to 100,000 won. But the limit was later raised to 150,000 won in cash and 300,000 won in bank savings because of widespread protests, according to DailyNK, an online newspaper with informants in the North. The official exchange rate is 135 won to the dollar but the black market rate is between 2,000 and 3,000.