North Korean won

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North Korean won
조선민주주의인민공화국 원 (Korean)
1000 North Korean Won.jpg
Old 1000 won banknote of the second won
ISO 4217 code KPW
Central bank Central Bank of the Democratic People's Republic of Korea
User(s)  North Korea
Subunit
 1/100 chon (전/錢)
Symbol
Plural The language(s) of this currency does not have a morphological plural distinction.
Coins 1, 5, 10, 50 chon, ₩1 [1]
Banknotes ₩5, ₩10, ₩50, ₩100, ₩200, ₩500, ₩1000, ₩2000, ₩5000[2]
North Korean won
Chosŏn'gŭl 조선민주주의인민공화국 원
Hancha 朝鮮民主主義人民共和國圓
Revised Romanization Joseon minjujuui inmin gonghwaguk won
McCune–Reischauer Chosŏn minjujuŭi inmin konghwakuk wŏn

The won (symbol: ; code: KPW) is the official currency of North Korea. It is subdivided into 100 chon. The won is issued by the Central Bank of the Democratic People's Republic of Korea, based in the capital city, Pyongyang. The official currency of South Korea, issued by the Bank of Korea which is based in its capital city, Seoul, is divided into the same number of units, and is known as the South Korean won.

Etymology[edit]

Won is a cognate of the Chinese yuan and Japanese yen. All three names derive from the Chinese word written (원), which means "round shape." The won is subdivided into 100 chon (전; 錢; McCune-Reischauer: chŏn; Revised Romanization: jeon).

History[edit]

For the Korean won before the North–South division, see Korean won.

The won became the currency of North Korea on December 6, 1947, replacing the Korean yen that was still in circulation.[3]

North Korean won are intended exclusively for North Korean citizens, and the Bank of Trade (무역은행) issued a separate currency (or foreign exchange certificates) for visitors, like many other socialist states. However, North Korea made two varieties of foreign exchange certificates, one for visitors from "socialist countries" which were colored red and hence nicknamed "red won",[4] and the other for visitors from "capitalist countries" which were colored blue/green and hence known as "blue won".[4] FECs were used until 1999, then officially abolished in 2002, in favor of visitors paying directly with hard currency, especially the euro.[5]

Dollar peg removed[edit]

Since 2001, the North Korean government has abandoned the iconic rate of 2.16 won to the dollar (which is said to have been based upon Kim Jong-il's birthday, February 16)[6] and banks in the country now issue at rates closer to the black market rate. More recent official rates have shown the North Korean won (as of 2 Dec 2013) to be ₩130.740 to the US dollar.[7] However, rampant inflation has been eroding the North Korean won's value. A report by defectors from North Korea claimed that the black market rate was ₩570 to the Chinese yuan (or about ₩4,000 per U.S. dollar) in June 2009.[8] In any case, the U.S. dollar and other currencies are still worth more in North Korean won on the black market than officially.

2009 revaluation[edit]

The won was revalued in November 2009[9][10] for the first time in 50 years.[11][12] North Koreans were given seven days to exchange a maximum of ₩100,000 (worth approximately US$40 on the black market) in ₩1,000 notes for ₩10 notes, but after protests by some of the populace, the limit was raised to ₩150,000 in cash and ₩300,000 in bank savings.[13] The official exchange rate at this time was around $740 but black market value of the ₩150,000 was estimated to be near $30.[14] The revaluation, seen as a move against private market activity, wiped out many North Koreans' savings.[13] The Times speculated that the move may have been an attempt by the North Korean government to control price inflation and destroy the fortunes of local black market money traders.[15] The announcement was made to foreign embassies but not in North Korean state media.[15][16] Information was later carried via a wire-based radio service only available within North Korea.[17]

As part of the process, the old notes ceased to be legal tender on November 30, 2009, with notes valued in the new won not being distributed until December 7, 2009.[15] This meant that North Koreans would not be able to exchange any money for goods or services until that date and most shops, restaurants and transport services had been shut down for the week.[15] The only services that remained open were those catering to the political elite and foreigners which continued to trade exclusively in foreign currency.[15] The measure had led to concerns amongst North Korean officials that it would result in civil unrest; this was not the case.[15] China's Xinhua news agency described North Korean citizens in a "collective panic";[18] army bases were put on standby and there were unconfirmed reports of public protests in the streets in a handful of North Korean cities and towns that forced authorities to slightly increase the amount of currency people would be allowed to exchange.[19] Piles of old bills were also set on fire in separate locations across the country, old paper notes were dumped in a stream (against laws of the desecration of images of Kim Il-sung) and two black market traders were shot dead in the streets of Pyongsong by local police, according to international reports.[20][21] Authorities threatened "merciless punishment" for any person who violated the rules of the currency change.[22]

Pictures of the new notes were published on December 4, 2009, in the Chosun Shinbo, a North Korean newspaper based in Japan.[23][24] The paper claimed that the measure would weaken the free market and strengthen the country's socialist system.[25] However, the won plummeted 96 percent against the U.S. dollar in the ensuing days after revaluation.[26] According to one report, however, North Korea backtracked on some aspects of the revaluation following a riot by market traders which led to 12 executions.[27] Authorities eventually raised the limit to 500,000 won, Chosun said, and promised no probe into savings of up to one million won and unlimited withdrawals if savings of more than one million are properly explained.

In February 2010, some of the curbs on the free market were eased and a senior party official sacked after incidents of unrest.[28] Pak Nam-gi, the director of the Planning and Finance Department of North Korea's ruling Workers' Party, was later executed in 2010.[29] North Korea denied any serious crisis relating to the revaluation.[30]

Coins[edit]

Second won[edit]

The first North Korean coins for circulation were minted in 1959 in the denominations of 1, 5, and 10 chon. These coins were often restruck with the original dates in later years, however, 1970 and 1974 dates also appear on the 1 and 5 chon. In 1978, 50 chon coins featuring the Chollima horse statue and a rising sun were introduced into circulation during the 1979 currency reform to allow greater flexibility for vendors by eliminating the 50 chon banknote and large amounts of "small change" coinage carried. In 1987, 1 won coins featuring the Grand People's Study House were introduced however, they did not fully replace the 1 won note which remained legal tender.

When the historic 2.16 peg to the dollar was abandoned in 2001 to allow for greater convertibility the coins began to lose value. After 2003, these coins were rarely seen in circulation but were still redeemable. Later, a new set of coins was introduced in 2005 in denominations of 5, 10, 50, and 100 won. These coins were less impressive in design compared to the older series, being very plain and generic in design. All circulation coins of the Second Won were struck in aluminum.

Circulated Coins
Value Technical parameters Description Date of minted year
Diameter Composition Obverse Reverse General issue
(no star)
Socialist visitor
(1 star)
Capitalist visitor
(2 stars)
Year last
circulated
1 chon 16 mm Aluminium[31] State title, Coat of arms, year of minting Value, (optionally, star(s)) 1959, 1970 1959 1959  ?
5 chon 18 mm 1959, 1974 1974 1974  ?
10 chon 20 mm 1959 1959 1959  ?
50 chon 25 mm Bank title, Coat of arms, value Chollima statue, year of minting,
(optionally, star(s))
1978 1978 1978  ?
₩1 27 mm Bank title, Coat of arms, value, year of minting Grand People's Study House 1987 N/A N/A  ?
₩5 21 mm Value 2005 N/A N/A 2009
₩10 23 mm 2005 N/A N/A 2009
₩50 25 mm 2005 N/A N/A 2009
₩100 27 mm 2005 N/A N/A 2009
For table standards, see the coin specification table.

Following other socialist economies like Cuba and China, North Korea developed a special system of marking coins for two groups of foreign visitors. Issued in 1983, these coins were part of the "Pakkundon" convertible series. Coins with no "stars" were for general circulation in North Korea, coins marked with one star were for "socialist visitors", and coins marked with two stars were for designated for "capitalist visitors". A fourth set, intended for collectors rather than circulation, was struck with the word "specimen" in Korean characters in the areas where the stars would be. The specimen set is the least common of the four. Besides the general circulating coins, there are an abundance of different commemorative coins minted in the name of the DPRK. Most, if not all of them are sold to foreign numismatists. Some of these are official, state approved coins, others are not.

Third won[edit]

Coins were issued in 10, 50 chon and 1 won denominations in 2002 and 1 and 5 chon denominations in 2008. All denominations are struck in aluminum. These coins feature the national coat of arms on the obverse and flowers, particularly the Kimjongilia and the Kimilsungia, on the reverse of the 10 and 50 chon. A magnolia adorns the 1 won.[23]

Initially struck in 2002, the coins were intended for use shortly after the dollar peg was removed from the currency. The 50 chon and 1 won were smaller than the previous designs, while the new 10 chon was the same size as the old. Hyperinflation became a very sudden reality, however, and the new coins were never released as planned. In 2008, 1 and 5 chon coins were also struck when a plan for monetary revaluation began. The coins were finally released into circulation in December 2009 but due to the flawed nature of the revaluation these coins again carry very little value, with especially the 1 and 5 chon being virtually irrelevant.

Circulated Coins
Value Technical parameters Description Date of minted year
Diameter Mass Composition Obverse Reverse
1 chon 18.0 mm 0.8 g Aluminium[32] Coat of arms, Value Flower, Year of minting 2008
5 chon 19.0 mm 0.9 g Flower, Year of minting 2008
10 chon 20.0 mm 1.0 g Flower, Year of minting 2002
50 chon 22.1 mm 1.55 g Flower, Year of minting 2002
₩1 24.1 mm 1.9 g Flower, Year of minting 2002
For table standards, see the coin specification table.

Banknotes[edit]

The first banknotes of "North Korea" were issued in 1945 by the Russian backed provisional government above the 48th parallel. These were in denominations of 1, 5, 10, and 100 won. These were discontinued shortly after Soviet forces withdrew and recognized the newly independent state.

First won[edit]

This currency was issued in all banknote form, with the first banknotes of this issue in denominations of 15, 20, and 50 chon along with 1, 5, 10 and 100 won in 1947. The chon notes had stylized art designs while the won denominations were fairly uniform in design featuring a farmer and a worker standing together and holding the symbolic tools. This currency was later revalued in 1959 at a rate of one new won to 100 old won to fix the inflation that had occurred as a result of the Korean War.[33]

Second won[edit]

In 1959, the old won was replaced with the Second Won, with price and exchange rates fixed to the U.S. dollar. This banknote series was issued in denominations of 50 chon, and 1, 5, 10, 50, and 100 won. These notes were much larger than the previous issue and depicted images representing various industries in the economy.

In 1979, the currency was again reformed, and a new banknote series was issued in denominations of 1, 5, 10, 50, and 100 won. There is ongoing speculation as to why this move was made. All 1959 banknotes were removed from circulation. Circulating coins, however, were not affected by this change. The designs for this issue were much more symbolic and charismatic than previous ones, with Kim Il Sung featuring for the first time on the 100 won.

In 1992, another redesign was carried out for banknotes, again in denominations of 1, 5, 10, 50, and 100 won. Older notes were once again withdrawn. These notes were smaller and crisper than the previous issue and depicted more modern themes. The 5 and 10 won were again issued in 1998, along with a 500 won banknote the same year but were stamped rather than engraved reflecting poorer production quality. In 2005, a 200 won banknote was issued, followed by 1,000 and 5,000 won banknotes in 2006. The latter two were identical in design to the 100 won though differing in colors and added security features, but the colored fields behind the text no longer extended all the way to the margins. In 2007, the 500 won had also been revised in this same manner along with being engraved for the first time to protect against counterfeiting.

In 2007, a commemorative version of this banknote series was released, stamped "Great Leader Comrade Kim Il sung's 95th Birthday" on each denomination.

As explained above, there are two varieties of foreign certificates. For the 1978 banknote series, foreign certificates, called "Pakkundon", meaning "exchangeable money" were implemented by an overstamp and serial number color. This was intended to protect the value of the national currency in North Korea's command economy. These were first released in 1983 in two forms, one for "socialist visitors" which had a red stamp, and one for "capitalist visitors" which had a green stamp. Another series was released in 1986 with either a blue or red Guilloché style stamp. These were issued in all denominations, except for the ₩100 note, presumably because it was assumed by the government that foreigners would not show proper respect for its depiction of Kim Il-sung. These notes were discontinued in 1988 and replaced with a new series of Pakkundon in all banknote form that was more distinguishable and unmistakable from generic circulation currency.

Banknotes of the North Korean won (1978 issue)
Image Main color Value Obverse Reverse
[3] Olive-green ₩1 Army officer, woman and children Male and female soldiers; Yang Helyong (scenes from the opera Sea of Blood)
[4] Blue-gray ₩5 Worker with a cogwheel and holding a political book; peasant woman holding a sheaf of wheat; factories in the background Mount Kumgang (Kumgangsan)
[5] Brown ₩10 Chollima Chollima steel complex
[6] Olive-green ₩50 Soldier; peasant woman; officials of the Workers' Party of Korea Lake
[7] Brown and lilac ₩100 Kim Il-sung Mangyongdae (the birthplace of Kim Il-sung)
Variation of the 1978 Series
Overstamp Serial number color Target users[citation needed]
None 1 red, 1 black General circulation
Green with Korean text 2 black Socialist visitors 1983
Red with Korean text 2 red Capitalist visitors 1983
Red guilloché with numeral 2 red Capitalist visitors 1986
Blue guilloché with numeral 2 black Socialist visitors 1986

In 1988, the Bank of Trade (무역은행) (as opposed to the Central Bank) issued two unique series of foreign certificates. They both included 1 chon, 5 chon, 10 chon, 50 chon, ₩1, ₩5, ₩10, and ₩50. The series for "capitalist visitors" was blue-green, while the series for "socialist visitors" was pink.[34] The chon notes had a simple design of patterns and the values, while the socialist won notes depict the International Friendship Exhibition, and the capitalist won notes depict the Chollima statue.[35]

Banknotes in circulation for the second won, up to December 2009, were as follows:

1992 Series
Value Dimensions Main Color Description Date of issue
Obverse Reverse Watermark
₩1 116 × 55 mm Green Actress Hong Yong-hee in her film role as The Flower Girl Mount Kumgang Chollima statue 1992
₩5 126 × 60 mm Blue Students, Kim Il Sung University, Mangyongdae School Children's Palace Grand People's Study House 1992, 1998
₩10 136 × 65 mm Brown-orange Factory worker, Chollima (1000 Ri horse) Western sea barrage and locks at Taedong Gang
₩50 146 × 70 mm Orange Young professionals, Juche Tower Paektu Mountain Juche Tower 1992
₩100 156 × 75 mm Red and brown Kim Il-sung The birthplace of Kim Il-sung, Mangyongdae-guyok Arch of Triumph 1992
₩200 140 × 72 mm Blue and green Siebolds-Magnolia (National Flower of Korea) Value Chollima statue 2005
₩500 156 × 75 mm Dark green Kumsusan Memorial Palace Chongnyu bridge[36] Arch of Triumph 1998
₩1000 Green-cyan Kim Il-sung The birthplace of Kim Il-sung, Mangyongdae-guyok 2002
₩5000 Violet

Third won[edit]

In 2009, another currency reform was initiated to tackle hyperinflation and black market activities. Unlike previous reforms, the 2009 move sparked a nationwide panic when it was announced there would be a two-week waiting period between the withdrawal of the old currency and the introduction of the new currency, coupled with an exchange limit of only 500,000 old won for each person, effectively wiping out savings. The state eventually pulled back on most exchange limits; however, the revaluation proved to be a failure.

Like the coins for this series, some of the denominations were initially printed in 2002 but were never released into circulation, pointing to a planned monetary revaluation much earlier than 2009 that was never carried out.

The current series of banknotes of the third won are issued in values of 5, 10, 50, 100, 200, 500, 1 000, 2 000, and 5 000 won. Kim Il-sung is depicted only on the obverse of the highest denomination, with the 100 won note featuring the Magnolia (National Flower) and other notes depicting generic people or various monuments in North Korea.[23] The exchange rate was 100 second won to 1 third won.[37]

In 2012, another commemorative series of banknotes was released, this time in the 2002-2009 series but similarly stamped "Great Leader Comrade Kim Il Sung's 100th Birthday." Once again this stamp appeared on all denominations.[38]

On July 25, 2014, a new 5,000 won note was released into circulation. Instead of depicting the portrait of North Korea's founder Kim Il-sung, the note depicts the image of his birthplace in Mangyondae and on the back the International Friendship Exhibition in Myohang that displays gifts he and his son Kim Jong-il received from foreign leaders.[39][40][41]

2009 series[23]
Image Value Dimensions Main Color Description Date on notes Remark
Obverse Reverse Obverse Reverse Watermark
[8] [9] ₩5 145 × 65 mm Navy blue Scientist and student Hwanggang hydroelectric dam and power station Mongnan (Seibold’s magnolia) flowers Juche 91, 2002
[10] [11] ₩10 Olive Green Soldiers (Air Force, Navy, Army) Victory Monument of the Korean War
[12] [13] ₩50 Purple Engineer, farmer and working intellectual Monument to the Founding of the Workers' Party of Korea
[14] [15] ₩100 Green Siebolds-Magnolia (National Flower of Korea) Value Juche 97, 2008
[16] [17] ₩200 Burgundy Chollima statue
[18] [19] ₩500 Grey Arch of Triumph
[20] [21] ₩1000 Red House in Hoeryong Samji lake The obverse depicts Kim Jong-suk’s birth place
[22] [23] ₩2000 Blue Log cabin on Paektu Mountain, Jong Il Peak Paektu Mountain The obverse depicts Kim Jong-il’s alleged[42] birth place
[24] [25] ₩5000 Brown Kim Il-sung Mangyongdae
₩5000 Mangyondae International Friendship Exhibition in Mt. Myohang Juche 103, 2014
Current KPW exchange rates
From Google Finance: AUD CAD CHF EUR GBP HKD JPY USD
From Yahoo! Finance: AUD CAD CHF EUR GBP HKD JPY USD
From XE.com: AUD CAD CHF EUR GBP HKD JPY USD
From OANDA.com: AUD CAD CHF EUR GBP HKD JPY USD
From fxtop.com: AUD CAD CHF EUR GBP HKD JPY USD

Note: Rates obtained from these websites could be substantially different from black market rate

Other currency used[edit]

The BBC reported in 2009 that in some department stores in Pyongyang, the North Korean won is not accepted; and the stores only take Chinese Yuan and U.S. dollars.[43]

As of April 2013, most stores in North Korea take Euros and Chinese Yuan/Renminbi. As more RMB are brought into the country than EUR is, change from transactions is prominently returned in Renminbi.

See also[edit]

References[edit]

  1. ^ "북한의 새로 발행된 화폐들" (in Korean). ccdailynews.com. December 4, 2009. 
  2. ^ North Korea revalues and replaces currency. BanknoteNews.com. December 4, 2009.
  3. ^ Cho, Lee-Jay; Kim, Yoon Hyung (1995). Economic systems in South and North Korea: the agenda for economic integration. Korea Development Institute. p. 161. ISBN 978-89-8063-001-1. 
  4. ^ a b http://www.dailynk.com/english/read.php?cataId=nk00100&num=5081
  5. ^ Linzmayer, Owen (2012). "North Korea". The Banknote Book. San Francisco, CA: www.BanknoteNews.com. 
  6. ^ Hoare, James; Pares, Susan (2005). North Korea in the 21st century: an interpretive guide. Global Oriental. p. 145. ISBN 978-1-901903-96-6. 
  7. ^ USD to KPW exchange rate, XE.com. Retrieved 2010-06-22.
  8. ^ Yong, Lee Sang (June 24, 2009). The Color of North Korean Money. Daily NK.
  9. ^ Ho, Jung Kwon (November 30, 2009). North Korea Replaces Currency. Daily NK.
  10. ^ Choe Sang-Hun (December 9, 2009) New York Times (Global Business), "North Korea Revalues Its Currency"
  11. ^ The Wall Street Journal, Wednesday December 2, 2009 North Korea Reissues Won, a Blow to Unofficial Economy
  12. ^ The Wall Street Journal, Thursday December 3, 2009 North Korea Begins Won Swap, Curfew
  13. ^ a b Harden, Blaine (December 2, 2009). 'North Korea revalues currency, destroying personal savings'. The Washington Post.
  14. ^ Haggard, Stephen and Marcus Noland (January, 2009). [1].
  15. ^ a b c d e f Parry, Richard Lloyd (December 2, 2009). North Koreans in shock as cash is 'banned'. The Times.
  16. ^ Currency reform sparks anger in North Korea. Press TV. December 2, 2009.
  17. ^ Hyun, Kim (December 2, 2009). N. Korea's official media silent about currency reform. Yonhap.
  18. ^ North’s currency action shocking to its citizens. Joongang Daily. December 3, 2009.
  19. ^ McNeil, David (December 3, 2009). "North Koreans dares to protest as devaluation wipes out savings". The Independent (London). 
  20. ^ Ramstad, Evan (December 9, 2009). "North Koreans Protest Currency Issue". The Wall Street Journal. 
  21. ^ "North Koreans burn bills over currency reform". The China Post. December 5, 2009. 
  22. ^ "N Korea cash switch 'sparks panic'". Al Jazeera. December 3, 2009. 
  23. ^ a b c d Kook, Park Sung (December 4, 2009). "New Denomination Images Unveiled". Daily NK. 
  24. ^ Kirk, Donald (December 4, 2009). "North Korea admits drastic currency reform, is silent on protests". The Christian Science Monitor. 
  25. ^ AFP (December 9, 2009). "Currency change cripples N.Korea markets: report". 
  26. ^ Lim, Bomi (December 9, 2009). "North Korean Won Plunges 96% After Government Revaluation". Bloomberg L.P. 
  27. ^ "N.Korea backtracks on currency change: report". AFP. December 15, 2009. 
  28. ^ Parry, Richard Lloyd (February 4, 2010). "Food shortages and violence mount in North Korea as Utopian dream fails". London: The Times. 
  29. ^ "North Korea Executes Official for Currency Reform, Yonhap Says". Bloomberg. March 17, 2010. 
  30. ^ "North Korea Says No Chaos After Currency Reform". Associated Press. April 1, 2010. 
  31. ^ Bruce, Colin R.; Michael, Thomas (2007). Standard Catalog of World Coins 1901–2000. Krause Publications. p. 1313. ISBN 978-0-89689-500-3. 
  32. ^ [2]
  33. ^ Schuler, Kurt (2004). "DPRK Economy". Tables of Modern Monetary Systems. 
  34. ^ Bruce, Colin R.; Shafer, Neil (1999). Standard Catalog of World Paper Money, Modern Issues, Volume 3. Krause Publications. p. 424. ISBN 978-0-87341-746-4. 
  35. ^ Bank notes of the modern world – North Korea. bank-note.org.
  36. ^ BANK NOTE MUSEUM, retrieved 2013-06-17 
  37. ^ http://www.faz.net/s/RubEC1ACFE1EE274C81BCD3621EF555C83C/Doc~EC0D4527A47FA4F4D8F0F381FC6AC7FA2~ATpl~Ecommon~Scontent.html
  38. ^ North Korea new 100th birthday commemorative notes confirmed BanknoteNews.com. March 14, 2014. Retrieved on 2014-07-09.
  39. ^ N.Korea Drops Kim Il-sung from New Banknotes The Chosun Ilbo (english.chosun.com). August 11, 2014. Retrieved on 2014-08-11.
  40. ^ NK Caught Off Guard by Disappearance of Kim DailyNK (www.dailynk.com). August 1, 2014. Retrieved on 2014-08-13.
  41. ^ Past as Prelude: Kim Il Sung Will Reappear DailyNK (www.dailynk.com). August 15, 2014. Retrieved on 2014-08-16.
  42. ^ "Profile: Kim Jong-il". BBC News. 16 January 2009-01-16. Retrieved 2009-12-11. 
  43. ^ "In pictures: Life in poverty-stricken North Korea". BBC News. September 22, 2009. 
North Korean won
Preceded by:
Korean yen
Reason: Division of Korea and moving toward a full sovereign nation from Allied occupation
Currency of North Korea
18 April 1980 – 12 April 2009
Note: 1st Won: 1945 to 1959
2nd Won (equivalent to 100 1st Won): 1959 to 2009
3rd Won (equivalent to 100 2nd Won): 2009 onwards
Succeeded by:
Current