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North Korea 'eases market curbs' North Korea 'eases market curbs'
(10 minutes later)
North Korea has started to ease restrictions on private markets, according to South Korea's spy agency. Increasing social unrest has led North Korea to ease restrictions on private markets, say reports.
The move is reported to be in response to growing public discontent following a recent currency revaluation. The move follows a recent currency revaluation which wiped out many cash savings in the country.
Under the reform, only a limited amount of old banknotes could be exchanged for new ones, wiping out many cash savings. The revaluation appears to have been an attempts by North Korea's leaders to reassert control over the economy.
Correspondents in South Korea say allowing markets to operate more freely may be the only way for many in the North to feed themselves. But correspondents in South Korea say allowing markets to operate more freely may be the only way for many in the North to feed themselves.
A spokesman for South Korea's National Intelligence Service (NIS) said signs of an easing of restrictions had been detected "in various places".A spokesman for South Korea's National Intelligence Service (NIS) said signs of an easing of restrictions had been detected "in various places".
The authorities "may not have been able to keep ignoring people's demands," the spokesman told the AFP news agency.The authorities "may not have been able to keep ignoring people's demands," the spokesman told the AFP news agency.
The BBC's John Sudworth in Seoul says the traders and smugglers who manage to cross North Korea's tightly-sealed border with China have reported runaway inflation, food shortages and civil unrest in recent weeks.The BBC's John Sudworth in Seoul says the traders and smugglers who manage to cross North Korea's tightly-sealed border with China have reported runaway inflation, food shortages and civil unrest in recent weeks.
Organisations with contacts in the North saying some people had attacked security agents patrolling markets.Organisations with contacts in the North saying some people had attacked security agents patrolling markets.
The unrest followed a 30 November decree that old North Korean banknotes would be swapped for new ones at a rate of 100 to one.The unrest followed a 30 November decree that old North Korean banknotes would be swapped for new ones at a rate of 100 to one.
The amount of currency people were allowed to exchange was reportedly restricted, and any cash held above that became worthless - effectively wiping out some people's savings.The amount of currency people were allowed to exchange was reportedly restricted, and any cash held above that became worthless - effectively wiping out some people's savings.
Control attemptControl attempt
The revaluation also led to spiralling inflation.The revaluation also led to spiralling inflation.
According to traders quoted in the South Korean newspaper Chosun Ilbo, $1 fetched 98 won at the beginning of the revaluation whereas it is now worth between 300 to 500 won.According to traders quoted in the South Korean newspaper Chosun Ilbo, $1 fetched 98 won at the beginning of the revaluation whereas it is now worth between 300 to 500 won.
Currency change sparks panic Struggle to control economyCurrency change sparks panic Struggle to control economy
On Wednesday, South Korean media reported that a top North Korean finance official had been sacked over the chaotic move.On Wednesday, South Korean media reported that a top North Korean finance official had been sacked over the chaotic move.
Pak Nam-Ki, the Communist Party's director for planning and finance, had reportedly been absent from public activities since early January.Pak Nam-Ki, the Communist Party's director for planning and finance, had reportedly been absent from public activities since early January.
The revaluation was apparently an attempt by North Korean leader Kim Jong-il to reassert state control over the economy and curb free-market activity.The revaluation was apparently an attempt by North Korean leader Kim Jong-il to reassert state control over the economy and curb free-market activity.
But if that was the intention, it seems to have worked too well, says our correspondent.But if that was the intention, it seems to have worked too well, says our correspondent.
North Korea introduced limited market reforms in 2002, which allowed people to buy and sell goods at free markets.North Korea introduced limited market reforms in 2002, which allowed people to buy and sell goods at free markets.
These markets have become increasingly important to ordinary North Koreans, with a wide range of goods on offer, such as imported fruit, clothes and electronics unavailable in state shops.These markets have become increasingly important to ordinary North Koreans, with a wide range of goods on offer, such as imported fruit, clothes and electronics unavailable in state shops.
Some analysts say the main reason for the currency revaluation was rein in the newly emerging middle class, many of whom have made their money trading in the free markets.Some analysts say the main reason for the currency revaluation was rein in the newly emerging middle class, many of whom have made their money trading in the free markets.