Tuesday, December 29, 2009

North Korea to Ban All Foreign Currencies

By Andrew Moran
Digital Journal
Monday, December 28, 2009


The North Korean government will ban its citizens from possessing, using or trading foreign currencies. The restriction would also affect visitors from other nations.
According to a report from a Seoul-based North Korean news website on Monday, the government of North Korea will restrict citizens to use foreign currencies, while the ban will also apply to visiting foreigners, reports Global Times. The latest decision by Kim Jong-il’s government is to curb inflation, which maybe increased due to foreign currencies.

Earlier this month, Pyongyang banned locals and foreigners from using United States Dollars and Euros. In the past, tourists could pay hotels and restaurants with foreign money. But now stores, merchants, hotels, restaurants and other places of business cannot accept any other currency.

This move may upset the general public and some reports state Koreans will not surrender their currency voluntarily. However, the North Korean People’s Security Agency declared that citizens will receive severe punishment if they do not hand over international currencies.

Joong Ang Daily reports that the North Korean regime will confiscate all foreign currency owned by citizens. Furthermore, trading companies who have earned US Dollars through exports must deposit the money within the next 24 hours. Tourists visiting the country must exchange their currency for North Korean Won.

An anonymous source said, “For now, it would be difficult to use foreign currency but that will change over time. We just don’t have faith in the North Korean won.” While another businessman stated, “No foreign currencies such as the U.S. dollar, euro, yen or yuan can be used in North Korea from Jan. 1. Authorities have ordered that all foreign currencies should be exchanged into the North Korean won.”

Nevertheless, Donga notes that experts believe North Korea will never be able to get rid of foreign currencies because it’s described as “foreign currency paradise” due to major economic and financial transactions being conducted since the early 1990s.

Digital Journal reported in December that citizens are buying as much as they can with their local currency because a major revaluation is being conducted by the central bank. Residents fear that their savings may be wiped out.

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