Chaos In North Korea As Currency Devalued By 100 To 1

kim jong il

After 17 years of inaction, North Korea has suddenly removed two zeroes from its currency value due to rampant inflation.

Korea Times: A North Korean foreign trading official based in China reportedly said the reclusive state set the exchange rate as 100 to 1 and accordingly, the old denomination of 1,000 won is replaced by the new 10 won.

According to North Korea’s fixed exchange rate before the revaluation, a U.S. dollar was equivalent to 135 North Korean won.

“Black markets in Pyongyang have turned chaotic as people rushed to convert the local currency into Chinese yuan or the U.S. dollar,” the official was quoted as saying by Yonhap News.

Here’s why, from an older article:

World Focus: The official rate for the North Korean won is 142 per U.S. dollar, but due to severe inflation since the mid-1990’s, the black market rate is over 3000 KPW to $1.

You know something is wrong when North Korean regulaton is forced to face economic reality.