코로나 발생 기간 중 북한 시장환율 분석

Abstract

During Covid19, the North Korean Won(KPW) strengthened by almost 50% from 8,300 KPW per USD to 4,600 KPW per USD. Compared with other small and big economies’ exchange rates, this is singular. There was not even a single case of a currency strengthening against the dollar during Covid19 but for the KPW. News agencies and academia raised 4 distinct possible causes. The most shallow and misleading reasoning was that due to the border closure between North Korea and China, there was no demand for the yuan or the dollar. They became cheaper to buy. A more thought through explanation was that the supply of KPW dropped either thru the coordinated effort of the government to strengthen the purchasing power of the won to garner support of the citizenry before the 8th congress or that the Central Bank of Chosun simply lost the ability to produce enough notes due to the depletion of the special paper and ink which was all imported. Lastly, a couple of researchers linked the phenomena to de-dollarization either as a policy or a given state of the economy. A simple regression has shown that trade explains roughly 25% of the movement in the exchange rate. So the first explanation can be said to be valid but nevertheless it can only be a minor cause of the event. The conjecture that this was a program to garner the support of the people lacks evidence. Rather, the people saw it as a threat to their livelihood. In fact it would make more sense to say that the market-savvy North Korean government would not have risked such a drastic measure before the 8th congress. Although it may seem comical that a nation could run out of paper and ink to print notes, there is ample evidence that this was in fact the case. The dictate from the Worker’s Party of Korea and the ensuing official report of the National Intelligence Service states clearly that there was a serious issue with the supply of KPW notes. As a corollary evidence there was wide coverage of the issuance and disappearance of the ‘Money Ticket’(돈표) which was made with local paper and ink, introduced specifically to alleviate the dire situation caused by the lack of proper KPW notes. Lastly, to view the strengthening of the won as part of an effort to de-dollarize is not corroborated by any precedent or theory. In fact it would be very unwise for any government to try to de-dollarize during the chaos and instability caused by Covid19. For any de-dollarization effort to succeed, macroeconomic stability must first be achieved.