As of December 17, 2024, North Korea is facing a severe currency crisis, with the North Korean won significantly devalued against the U.S. dollar and Chinese yuan. This economic turmoil has led to record high exchange rates, prompting many North Koreans to revert to a barter system for daily transactions. Reports indicate that individuals are increasingly trading essential commodities such as rice and cooking oil instead of relying on the local currency, which has lost much of its value [250d2c11].
Currently, the exchange rate stands at approximately 2 to 2.5 kilograms of rice per dollar, highlighting the drastic shift in economic behavior among the populace. Farmers have begun to receive more cash in their annual settlement shares due to the won's decline, but this has not alleviated the broader economic hardships faced by those without access to foreign currency [250d2c11].
Experts warn that the limited supply of foreign currency will further constrain its circulation, making it difficult for the average North Korean to engage in even small transactions. Moon Sung-min, a scholar specializing in North Korean studies, notes that foreign currency is not effective for facilitating minor purchases, exacerbating the challenges faced by citizens in their daily lives [250d2c11].
This crisis comes amidst broader economic challenges in the region, including the recent depreciation of the South Korean won and yen, which has raised concerns for both countries' export industries. As South Korea grapples with its own currency issues, the implications of North Korea's economic struggles could further complicate the geopolitical landscape in East Asia [22e341f6].
The situation remains fluid, with both North and South Korea facing significant economic pressures. The return to a barter economy in North Korea serves as a stark reminder of the severe impact of currency devaluation and the challenges of sustaining a stable economy under such conditions [250d2c11].