What is the North Korean Currency Now?

What is the North Korean Currency Now? 

The North Korean Won (KPW) is the official currency of the Democratic People’s Republic of Korea (DPRK), but it has been a subject of much intrigue and concern due to the country’s economic isolation and ongoing struggles with inflation and currency devaluation. 

This article takes a closer look at the history, current state, and challenges facing North Korean currency, shedding light on the deeper economic dynamics at play.

The History and Role of the North Korean Won

The North Korean won was introduced in 1947, just two years after the establishment of the DPRK. It replaced the Korean yen, which had been used during Japan’s colonial rule over Korea. The currency’s introduction was part of North Korea’s effort to assert its sovereignty and economic independence following the end of the Second World War.

Since then, the North Korean won has undergone several revaluations, particularly in efforts to combat hyperinflation. The most notable revaluation took place in 2009, when the government removed zeroes from the currency, a move that aimed to curb inflation and the hoarding of wealth. 

However, this initiative ultimately failed to stabilize the currency, and the country continued to face severe economic challenges.

Today, the North Korean won remains a symbol of the country’s self-reliance, but its actual value and purchasing power have been severely undermined by inflation, economic mismanagement, and external sanctions.

A Dual Currency System in North Korea

One of the most distinctive features of the North Korean economy is its dual currency system:

1. Official Exchange Rate: The government sets a fixed exchange rate for the won, which often bears little resemblance to its actual purchasing power.
2. Black Market Rate: Due to the government’s control over currency exchange and limited availability of foreign currency, much of the real-world value of the North Korean won is determined in the black market.

On the black market, the value of the won is typically much weaker than the official exchange rate. In 2025, for example, the official rate placed 1 U.S. dollar at around ₩900. However, on the black market, the same dollar was often exchanged for as much as ₩40,000. This discrepancy is a clear reflection of the country’s economic isolation and the lack of confidence in its official currency.

Inflation and the Struggles of the North Korean Won

Inflation is a major issue for the North Korean economy and has contributed significantly to the devaluation of the North Korean won.

In recent years, especially since late 2024 and into 2025, inflation has spiraled out of control. Basic goods, particularly food items such as rice and corn, have seen massive price increases due to the ongoing currency devaluation.

North Korea’s official inflation rate is rarely disclosed, but reports from South Korean think tanks and defectors consistently point to double-digit inflation. According to some sources, staple food prices have surged fourfold in just a few years, straining families that already live in poverty. 

This economic pressure is exacerbated by international sanctions, which limit North Korea’s ability to trade internationally and access foreign currency.

The Black Market: North Korea’s Shadow Economy

The black market plays an essential role in North Korea’s economy, where most transactions are carried out in foreign currencies, such as the Chinese yuan and the U.S. dollar. Although using foreign currencies is technically illegal, the population has turned to them due to their relative stability compared to the volatile North Korean won.

Markets in Pyongyang and other cities feature foreign exchange rates that are vastly different from the government-controlled rates. This phenomenon, often referred to as “spontaneous dollarization”, allows citizens to protect themselves against the declining value of the North Korean won. 

The rise of foreign currency markets also reflects the limited effectiveness of North Korean currency policies and the resilience of the people who have found ways to circumvent government restrictions.

The Impact of Sanctions and International Relations

North Korea’s currency issues are deeply tied to its international relations, particularly the sanctions imposed by the United Nations and other countries due to its nuclear weapons program. These sanctions have left the country largely cut off from the global financial system, with limited access to global financial markets and investment. 

As a result, North Korea’s trade relations are restricted primarily to China and Russia, where the Chinese yuan has become a widely used alternative currency in both official and unofficial transactions.

The isolation of the North Korean economy and the political instability that results from its nuclear weapons program make the North Korean won highly volatile and prone to large swings in value, particularly in the context of international economic pressure.

The Future of the North Korean Currency

The future of the North Korean won remains uncertain. Given the country’s ongoing economic isolation, high inflation rates, and the reliance on black-market activity, the won’s real value will likely continue to fluctuate drastically in the coming years. 

Without significant economic reforms or a shift in international relations, the North Korean won will remain a highly speculative currency, used primarily for domestic transactions but with little standing in the global market.

For citizens, the continued devaluation of the won means that their savings and purchasing power are at constant risk. As North Korea faces mounting challenges both internally and externally, its currency will continue to be a reflection of these struggles to hold its value amidst an ongoing economic crisis.

A Currency in Crisis

The North Korean won has long been a symbol of the country’s self-reliant economic ideology, but its real-world value has been severely undermined by inflation, economic mismanagement, and international sanctions. 

The dual currency system, with its reliance on black market exchanges, reflects the challenges facing North Korea’s economy, where foreign currencies have become the preferred medium of exchange for many people.

While the country’s leadership continues to defend the won as a symbol of sovereignty, the reality is that the currency remains largely insulated from global financial systems, limiting its ability to be used outside North Korea’s borders. 

For now, the North Korean won will likely continue to face significant economic pressure, with inflation and currency devaluation remaining central challenges in the years ahead.