The won-to-dollar market exchange rate in North Korea has more than doubled over the past year, prompting the government to ban private foreign currency trading while opening state-run exchanges nationwide to encourage currency trading under state supervision. Notably, these state-run exchanges have recently begun posting daily exchange rates comparable to market rates.
A source in Pyongyang familiar with the domestic economy told Daily NK recently that the North Korean government posts current exchange rates at state-run exchanges in banks, markets, and other locations around the country every morning at approximately 10 a.m.
On March 25, the won-to-dollar exchange rate posted at a bank currency exchange in Pyongyang’s Chung (Central) district was 19,900 Korean won. That same evening, a private money changer in a nearby market advertised a rate of 21,000 won—making the government’s official rate only 5% lower than the market rate.
In September 2024, the won-to-dollar exchange rate at state-run market exchanges was 8,900 won, despite the market rate exceeding 16,000 won. The authorities had set this official rate in April 2024 and maintained it for over five months.
Recently, however, North Korea has begun updating exchange rates daily at state-run bank and market exchanges, significantly narrowing the gap with market rates.
North Korean authorities officially recognize two exchange rates: the government exchange rate of around 100 won to the dollar, and the rate used at state-run market exchanges, which closely tracks the market rate. Ordinary North Koreans don’t use the government rate, which severely overvalues the won—most are unaware it even exists.
The North Korean government published more realistic exchange rates for state-run market exchanges to crack down on private money changers and bring transactions under the official system. However, last year, these official rates failed to keep pace with skyrocketing market rates, so most North Koreans avoided them.
In continuing efforts to attract users to state-run exchanges, Pyongyang has not only begun posting daily rates similar to market values but also allows people to freely buy and sell foreign currency within certain limits. This contrasts with last year, when state-run exchanges would only buy foreign currency from the public, not sell it.
With state-run exchanges now offering rates comparable to informal markets and, with official approval, operating free from surveillance and crackdowns, the number of North Koreans using them has recently increased.
“State-run exchanges are definitely safer, so more people have started to trust and use them,” the source said.
However, since state-run exchanges limit foreign currency purchases to $300, North Koreans needing larger sums must still turn to private money changers. Additionally, many North Koreans remain uncomfortable with having to prove their identity and maintain detailed records of their foreign currency purchases, which is required at state-run exchanges.
“The government is applying exchange rates comparable to market rates as it attempts to ban dollar transactions through private money changers. But traders keep frequenting money changers because they need bigger sums of money and prefer the market rates,” the source explained.
“The state has an inexhaustible demand for foreign currency needed for imports, but private money changers must continue operating to maintain the balance between purchases and sales.”
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