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N. Korean households hold average US$1,300 in cash: BOK

All News 12:00 July 03, 2020

SEOUL, July 3 (Yonhap) -- North Korean families have average financial assets of over US$1,700 while holding more than two-thirds of their assets in cash, a central bank report said Friday.

The report from the Bank of Korea (BOK) suggested the average North Korean household had financial assets of $1,761 between 2012 and 2018, along with an average financial debt of $408.

It said North Korean households also held an average of $1,310 in cash during the cited period, though not necessarily in U.S. dollars.

North Koreans are believed to favor U.S. dollars and Chinese yuan over the North Korean currency.

The report is based on a survey of 212 North Korean defectors, 107 of whom came from areas near the border with China, 67 from inland urban areas and 40 from military-controlled regions.

In the survey, 27.8 percent of the total said they had experienced at least one form of informal financial services in the former communist homeland, including business deals on credit and money lending or borrowing.

North Korean households' financial assets peaked at an average $2,451 in 2016 but have been declining steadily ever since, the report showed, an apparent outcome of tightened U.N. sanctions after North Korea staged its sixth and latest nuclear test in September 2017.

"The size of North Korea's informal financial market is believed to still remain very small," the BOK said.

"Most informal financial transactions are aimed at supporting commercial transactions and do not provide much support to production activities as the proportion of productive capital remains very low," it added.

The BOK said the survey sought to identify and study North Korea's widely unknown informal financial market.

"North Korea's informal financial market is evolving into various forms, ranging from foreign exchange and private loans to investment and remittance, while there have been claims that there also exist private banking with deposit and lending services," it said.

"However, a thorough evaluation is not possible due to the lack of accurate information about the size and scope of the market."

bdk@yna.co.kr
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