DPRK devalues currency to 'fight inequality'

The Central Bank of the Democratic People's Republic of Korea (DPRK) has reportedly given citizens a week to exchange 100 old won for one new won.

Unconfirmed reports indicate that authorities have limited the total sum that an individual can exchange for new currency to 150,000 won in cash and 300,000 won in bank savings.

In the DPRK, citizens buy most of their necessities at publicly owned shops at subsidised prices.

But unregulated trading has emerged since the centrally planned economy struggled to cope amid the famines that hit the country in the early 1990s.

South Korea's Chosun Ilbo newspaper opined that the main motivation for the currency reform "appears to be Kim Jong Il's intention to throttle the emerging free market."

Lee Seung Yong of Seoul-based human rights group Good Friends, which claims to have "contacts" in the DPRK, said: "Hardest hit are the emerging middle class who had earned big wealth from the markets.

"They are angry and frustrated since most of their wealth based on the previous banknotes has been chipped away," Mr Lee went on, adding: "The main goal is to crack down on the private markets that had stoked capitalism and to place socialism back in control."