Korea, Dem People’s Rep of

Korea, Democratic People’s Republic of, (North Korea) had strong central planning with a limited and subordinate banking system, with its currency initially pegged to and later adjusted vis-à-vis the USD. The end of USSR support precipitated an acute depression in the 1990s, to which the authorities responded eventually with some limited liberalisations to wider economic arrangements, but which had little effect on the monetary policy framework.

Years Targets and attainment Classification
1974-2017 monobank plus state specialised banks, within central planning process, currency fixed to USD; doctrine of self-reliance; enterprise zone near borders with Russia and China set up 1991; end of USSR brings very sharp decline in income plus food shortages 1992-6, official response weak; public finances become difficult; large parallel forex market premium; from 2002 on devaluations of currency but still enormous black market premium; 2003 issue of public bonds (with lottery-style prizes rather than fixed interest return); limited liberalisations which do not yet change overall stance of policy; new commercial bank 2006, separated from central bank 2014; currency reform 2009/10 (1 new won = 100 old won) involving some confiscation of old won, followed by strong inflation and dollarisation; 2013 some reforms to planning arrangements  but financial elements remains largely state-controlled multiple direct controls MDC

Selected IMF references: [not member of IMF, no Article IV reports] Fact-Finding Report, 1997, pp4-5, 14. Other references: Savada (1993), pp107-9, 118-19; Worden (2008), pp162-3; Park et al. (2018), pp35-42; Hong (2018), pp26-9; Kim (2022), pp3, 7.