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N. Korea's inflation rate remains stable since 2015: report

All News 12:00 October 29, 2019

SEOUL, Oct. 29 (Yonhap) -- North Korea has maintained a stable rate of inflation since 2015 thanks to the reclusive regime's deliberate monetary policy measures, a report showed Tuesday.

Chung Yeon-wook, a researcher at NH Investment & Securities, said North Korea's inflation rate skyrocketed to 229 percent in 2011 and turned to negative in 2014, but it has remained near 5 percent since 2015.

"The North Korean regime's policy measures contributed to the results," Chung wrote in the report published by the state-run Korea Development Institute's (KDI) North Korean economy review. North Korea "seems to have either stopped issuing (its own) currency or quietly took corresponding measures."

The North Korean won has stayed mostly within a narrow band of around 8,000 to the U.S. dollar since 2013, indicating another sign of economic stability in the communist nation, Chung claimed.

Foreign currencies, such as the U.S. dollar and Chinese yuan, have been used in major transactions in the reclusive country.

"The stable foreign exchange rate has a big ripple effect because it allows people to predict their profits, boosts commercial trade and reduces price fluctuations," Chung said. "It is unlikely that Pyongyang will worsen its economy by policy failure like in the past."

In 2009, Pyongyang carried out a drastic devaluation of its currency in an apparent bid to curb inflation and undermine an ever-expanding local black market.

Under the currency reform, the North put a limit on the amount of money citizens can exchange for new bills, rendering the excess cash worthless.

While North Korea has heavily depended on exporting goods, such as coal, textiles and seafood, a series of international sanctions on the Kim Jong-un regime has jolted its already moribund economy in recent years.


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