North Korea revalues its currency

Citizens of North Korea will spend this week getting used to a new version of the country's currency, as the won is revalued for the first time in 17 years.

By exchanging old 1,000 won bills for new 10 won notes the Government in Pyongyang wants to curb the activities of traders in the black market, wiping out their savings.

Citizens will be limited to exchanging the equivalent of $60 at the old rate. The prices paid by consumers will change, but in theory the value of the goods should remain the same as the Government wants to ensure people still have the same buying power with their money.

The plan is also aimed at keeping inflation under control. Last week news about the currency revaluation, or redenomination, was slow to trickle out of the country, as it was initially announced through a closed circuit system that is transmitted directly through speakers in homes and streets.

It is reported that some people have tried to swap old currency notes with Chinese citizens living in North Korea, as the restrictions on exchanging old won bills do not apply to them.

It is thought United Nations sanctions that followed North Korea's second nuclear weapons test earlier this year are starting to bite on the country's battered economy.

First broadcast on World Business News