Black-Market Exchange Rates

In North Korea, you will find the one the most serious cases of hyperinflation in the world. As a tourist, you would never know this because North Korea has a government controlled exchange rate enforced in markets available to tourists. The government enforced exchange rate is typically around 108 Korean won to one US dollar. What you would be surprised by is the black-market exchange rate that is used in the markets where locals shop. These market controlled rates are astounding, rates are typically greater than 8,000 won to the US dollar.

               For one Egyptian company, the dueling exchange rates have caused a major crisis. Orascom, an Egyptian telecommunications and media company, decided to tap into the increase demand for cellular technology in North Korea. By late 2015, Orascom was claiming to have generated an eye-popping $450 million in profit. However, upon attempting to exchange their profit in won to dollars for export out of the country they would only be granted an exchange under the government controlled exchange rate. This resulted in their reported $450 million in profits being barely more than $8 million. At the time of this article, Orascom is still waiting to get their meager profit out of North Korea.

               It is issues like this that make investing internationally a risky venture. To read about the North Korean black-market exchange rate, please read the article from the Washington Post in its entirety.

North Korean economics 101: How much is a dollar worth?

Work Cited:

Talmadge | AP, E. (2017, February 06). North Korean economics 101: How much is a dollar worth? Retrieved February 14, 2017, from https://www.washingtonpost.com/world/asia_pacific/north-korean-economics-101-how-much-is-a-dollar-worth/2017/02/05/45b751aa-ec1e-11e6-a100-fdaaf400369a_story.html?utm_term=.2aa22a7dfca8