Introduction

The stability of North Korean exchange rates has been a longstanding puzzle for economic experts on the DPRK. Even with harsh sanctions and “maximum pressure” in place, market exchange rates of the North Korean won with US dollars (USD) and Chinese renminbi (RMB) have been remarkably stable. However, there are signs that North Korea’s exchange rate with the dollar has become slightly more volatile, while the exchange rate between the won and the RMB remains relatively stable. If the North Korean government has indeed been successfully shoring up the won, that ability may be starting to weaken somewhat, though we do not have enough data points to draw any firm conclusions. Nor is it clear yet that sanctions have finally started to affect exchange rates. Continued volatility in the US dollar exchange rate, however, may be evidence that sanctions are making the country’s foreign currency situation increasingly difficult.

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