North Korean Exchange Rate (NKW/USD)

Marcus Noland
BBC Online
Peterson Institute for International Economics
February 5, 2010

"In principle, currency reforms are not a bad thing. Governments often use them to signal after a period of high inflation that the bad days are in the past and that the government will pursue more responsible macroeconomic policies in the future. Typically a government issues new currency with a number of decimal places or zeroes removed, often linking the nominal value of the new currency to a well-known currency such as the dollar or euro. In recent years countries such as Turkey, Romania, and Ghana have implemented such reforms.

The North Korean case is significantly different from the conventional case in that the move was sprung on the populace without warning, and most critically, enormous limits were placed on the ability to convert cash holdings, in effect wiping out considerable household savings and the working capital of many private entrepreneurs. Citizens were instructed that they had one week to convert a limited amount of their old currency to the new currency at a rate of 100:1 (i.e., one new won would be worth 100 old won). The limit would not finance much more than a 50 kilo sack of rice at prevailing retail prices.

The announcement set off panic buying as people rushed to dump soon-to-be-worthless currency, buying foreign exchange or any physical good that could preserve value. As the value of the North Korean won collapsed on the black market, the government issued further edicts banning the use of foreign currency, establishing official prices for goods, and limiting the hours of markets and products that could be legally traded."

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Chart or Graph

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Analysis Report White Paper

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Video/Podcast/Media

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"North Korean villages in the Siberian wilderness?

We take a madcap look at one of the weirdest experiments of globalisation: North Korea's deceased leader Kim Jong-Il exporting his people and propaganda machine to Russia in a bid for cold, hard cash.

'You should see their way of living. They live in smelly barns in multiples of ten,' a Russian police chief tells us as he drives...

"North Korea 'is one of the most staggering human-rights and humanitarian disasters in the world.' - Vaclav Havel

KIMJONGILIA, The Flower of Kim Jong Il, is the first film to fully expose the disaster through a tapestry of defectors' stories, North Korean propaganda, and original performance. This feature documentary shows why the defectors fled, describes their hair-raising escapes,...

"Madeleine Albright is the last westerner to have visited North Korea, and Kim Jong-il." Recounting her meeting with the North Korean dictator, she asserts that he is not irrational or insane.

"In an attempt to display his statesmanship potential, Republican presidential candidate Mitt Romney wades into deep foreign policy waters discussing Iraq, North Korea and Russian Prime Minister Vladimir Putin."

The only escapee of North Koreas most brutal prison camp has lived to tell us a story of unspeakable horror. Starved of food and common humanity, Shin proves that gulags are still a tragic reality.

On May 25, 2009, North Korea announced that it had successfully conducted its second nuclear test, having expelled all international nuclear inspectors as a response to a tightening of sanctions by the UN Security Council.

The United Nations Security Council, President Obama and other global leaders have condemned North Korea's recent nuclear test and the launch of several short range missiles.

This documentary chronicles VBS.tv journalists' visit to North Korea. Once finally allowed to enter the country via China, the journalists are taken on a guarded and choreographed tour around Pyongyang and the DMZ (Demilitarized Zone).

Welcome to North Korea is a grotesquely surreal look at the all-too-real conditions in modern-day North Korea.

"Presented by Siegfried S. Hecker, Center for International Security and Cooperation, Stanford University

ABSTRACT

North Korea Nuclear Proliferation, Negotiation and the human aspects of an estranged country.

My seventh trip to North Korea in seven years produced another surprise -- North Korea decided to build its own light-water reactor and uranium enrichment facility....

Primary Document

"This armistice signed on July 27, 1953, formally ended the war in Korea. North and South Korea remain separate and occupy almost the same territory they had when the war began."

This document from the State Department details some major facts on North Korea, including information on population, geography, and economics.

PROFILE

Geography
Area: 122,762 sq. km. (47,918 sq. mi.), about the size of Mississippi.
Cities: Capital--Pyongyang. Other cities--Hamhung, Chongjin, Wonsan, Nampo, Sinjuiju, and Kaesong.
Terrain: About 80% of land area is moderately high mountains separated by deep, narrow valleys and small, cultivated plains. The remainder is lowland plains covering small, scattered...

"Today North Korea said that it has conducted a nuclear test in violation of international law. It appears to also have attempted a short-range missile launch. These actions, while not a surprise given its statements and actions to date, are a matter of grave concern to all nations. North Korea's attempts to develop nuclear weapons, as well as its ballistic missile program, constitute a threat...

"I am pleased that the United States and North Korea yesterday reached agreement on the text of a framework document on North Korea's nuclear program. This agreement will help to achieve a longstanding and vital American objective: an end to the threat of nuclear proliferation on the Korean Peninsula."

"The final thing, a subject that I want to open up personally before we go to the questions, is merely the Korean question.

I wrote a letter to Mr. Rhee in which I earnestly tried to express what is my understanding and, I believe, the American understanding of how we got into that war, what we were trying to achieve, where we are now, and what we are trying to do. In no case have we...

"Last night the Government of North Korea proclaimed to the world that it had conducted a nuclear test. We're working to confirm North Korea's claim. Nonetheless, such a claim itself constitutes a threat to international peace and security. The United States condemns this provocative act. Once again North Korea has defied the will of the international community, and the international community...

"At noon today I sent a message to the Congress about the situation in Korea. I want to talk to you tonight about that situation, and about what it means to the security of the United States and to our hopes for peace in the world.

Korea is a small country, thousands of miles away, but what is happening there is important to every American."

In this speech, President Harry Truman outlines the American war effort in Korea. Truman frames the conflict by describing the efforts in Korea as an attempt to prevent "world war III."

Since North Korea launched a long-range missile over Japan in 1998, relations with North Korea have been a highly politicized issue inside Japan, creating strong domestic support for taking a hard line against Pyongyang.

"Last February it was announced that withdrawals of U.S. ground combat forces from Korea would be held in abeyance pending the completion of a reassessment of North Korea's military strength and the implications of recent political developments in the region. That reassessment has been completed, and these policy issues have been discussed with our key allies in Asia, with principal defense...

"Over the past 15 months the North Koreans have pursued a stepped-up campaign of violence against South Korean and the American troops in the area of the Demilitarized Zone.

Armed raider teams in very large numbers have been sent into South Korea to engage in sabotage and assassination."

The record shows that the North Koreans have been quick to go to the conference table with the US when one or more of the following conditions have been obtained.

This edition of North Korea: A Country Study attempts to review the history and treat in a concise manner the dominant social, political, economic, and military aspect of contemporary North Korea.

"In early and mid-2009, the Democratic Peoples Republic of Korea (DPRK or North Korea) embarked on a course that included a series of extremely provocative military actions, a shift in power toward the military, emphasis on ideological purity, rising criticism of the United States, and going forward with its nuclear and missile program in spite of sanctions and objections from much of the rest...

The aggressive challenge to world order recently reignited by North Korea and the failure of the 1994 agreement between the United States and North Korea to achieve decisive change demand a new strong response.

"North Korea has been among the most vexing and persistent problems in U.S. foreign policy in the post-cold war period. The United States has never had formal diplomatic relations with the Democratic People’s Republic of Korea (the official name for North Korea). Negotiations over North Korea’s nuclear weapons program have consumed the past three U.S. administrations, even as some analysts...

The latest statements out of North Korea appear to be telegraphing their next set of provocative moves. They have threatened everything from further ballistic missile tests, another nuclear test, withdrawal from the armistice, and cyber warfare.

A North Korea policy review team was tasked in November 1998 by President Clinton and his national security advisors to conduct an extensive review of U.S. policy toward the DPRK.

"Speaker Chae, Vice Speaker Yun, Vice Speaker Koh, distinguished Members of the National Assembly, and honored guests:

I'm privileged to be among such friends. I stand in your Assembly as Presidents Eisenhower and Johnson have stood before me. And I reaffirm, as they did, America's support and friendship for the Republic of Korea and its people."

As a small country dependent on foreign trade and investment, North Korea should be highly vulnerable to external economic pressure.

"The use of mandatory sanctions is intended to apply pressure on a State or entity to comply with the objectives set by the Security Council without resorting to the use of force. Sanctions thus offer the Security Council an important instrument to enforce its decisions. The universal character of the United Nations makes it an especially appropriate body to establish and monitor such measures...

The personal secretary of Kim Il Sung, Mun Il (a Soviet Korean), came to me and at the commission of Kim Il Sung reported that they had received reliable information that in the near future the southerners intend to seize the part of the Ongjin peninsula.

"Soviet Foreign ministry advises to instigate Korean War only if the war will be quick and decisive."

Agreement between the Commander-in-Chief, United Nations Command, on the one hand, and the Supreme Commander of the Korean People's Army and the Commander of the Chinese People's volunteers, on the other hand, concerning a military armistice in Korea.

Underlining once again the importance that the DPRK respond to other security and humanitarian concerns of the international community.

On 25 November 1950, a day after United Nations and Republic of Korea forces began the offensive they expected would complete the unification of Korea, Communist China countered with a terrific, and very successful offensive of its own.

Kim Jong-il lays out his unique ruling philosophy. He describes the superiority of the Korean people, while also clarifying "new philosophical principles centered on man," namely, "man is the master of everything and he decides everything."

This document briefly outlines the events leading up to the Korean War.

Before dawn on Sunday, 25 June 1950, the North Korean army moved forcefully into the South, whose outgunned defenders were generally overwhelmed. Seoul, capital of the Republic of Korea, fell in four days.

This is a declassified document which discusses arms control in the Koreas, U.S. options in Korea, and how to reduce tension in the area.

Even though it focuses on a single, specific issue - Korean peninsula denuclearization - the six-party process has served as a catalyst for a more important regional issue: the future of Asia-Pacific security cooperation.

This piece explains the United Nations offensive against North Korea. Also, China enters the conflict and is engaged by United States and South Korean forces.

North Korea promised to shut down and seal its nuclear facilities at Yongbyon this quarter in a deal that implements the Six-Party Talks September 2005 Joint Statement, committing Pyongyang to dismantling its nuclear weapons program.

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FAQs

Could cyber-attacks be used to cause physical damage? What other vulnerabilities might be exploited in a cyber-attack? Could an attack disrupt infrastructure such as power grids? All these questions and more are answered in the FAQ below.

Is the threat of an EMP a legitimate concern? What kind of infrastructural damage is an EMP capable of? How long would the consequences of such an attack last? All these questions and more will be answered in this FAQ.

One of the most serious threats to national security, individual privacy, and protection of one's assets comes from Intellectual Property (I.P.) espionage. What kind of information may be stolen? Who is or has the capability of engaging in effective I.P. espionage? Has this already happened? What can the United States do? All these questions and more are answered in this FAQ.

Missile defense. It's been talked about for decades, some of us even grew up watching Patriot missiles shoot down Iraqi Scud missiles in the first Gulf War. But where do things stand today? Is it still needed? Should I care? Those questions and more are answered in the FAQ below.

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