With all the anti-American rhetoric one hears from the DPRK, it surprises many tourists when they find that they can make purchases in some locations with US dollars. Indeed, one is compelled to use foreign currency, usually Chinese RMB or Euros.
Daily NK reports today that the Korean People's Won (KPW) is nearly “obsolete" even among the Korean population:
With the greater relaxation of regulations on the market front this year, the private economy in North Korea expanded, but most people are said to believe the looser grip on trade at the marketplace is not to help improve people’s livelihoods but to secure more funds for the Kim Jong Un leadership, Daily NK sources have reported.
In terms of people's well being, this is a good thing as it allows people to actually maintain a decent standard of living. But, for the wider economy, it spells trouble:
Many donju and residents, unsure of when the North Korean state will flip its stance on foreign currency use, are said to be seizing this opportunity to save up while they can. “The belief is that regardless of your place in North Korean society, safety comes in one form and one form only: foreign currency savings.'