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N. Korea's inflation, exchange rate stabilizing after currency reform shock: Seoul

All Headlines 15:06 April 13, 2010

By Tony Chang

SEOUL, April 13 (Yonhap) -- North Korea's market prices and currency exchange rate appear to be stabilizing after severe fluctuations from an abrupt government-led currency reform last year, the Seoul government said Tuesday.

North Korea carried out a currency revaluation last November, a measure it said was to curb inflation. Analysts here linked it to a power transition from North Korean leader Kim Jong-il to his third and youngest son, Jong-un. The currency redenomination is said to have fueled inflation and severe food shortages, causing social unrest in the tightly controlled nation.

In its latest North Korea report submitted to parliament's foreign affairs committee, the Unification Ministry said that market prices in the country were on a "downward path" following recent measures by the North Korean authorities.

A kilogram of rice, which cost around 20 North Korean won immediately after the revaluation, soared to 1,000 won in mid-March but dropped to the 500-600 won range in early April, the ministry said.

The value of the North Korean won against the U.S. dollar, which nosedived to the 2,000-won range in mid-March from the 30-won range, also rose to the 600-700 won level in early April, according the ministry.

On Kim Jong-il, the ministry said the reclusive leader has made 43 public appearances this year as of Monday, about the same as last year during the same period, and added he is "actively continuing public outings." Kim is believed to have suffered a stroke in 2008, which spawned speculation of an imminent power transfer.

odissy@yna.co.kr
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