N Korea to ban US dollar

Ulhas Joglekar uvj at vsnl.com
Tue Nov 26 15:59:15 PST 2002


HindustanTimes.com

Monday, November 25, 2002

N Korea to ban US dollar

Agence France-Presse Seoul, November 25

North Korea is reportedly banning the use of US dollars in what experts speculated Monday, was retaliation against Washington's suspension of fuel oil supplies to Pyongyang.

The Stalinist country has decided to abandon the US currency and adopt euros instead as a means of making international payments, China's Xinhua news agency reported.

Quoting a letter sent from the state-run Korean Trade Bank, Xinhua said foreigners as well as North Koreans are advised to convert US dollar accounts into euros or other currencies this month.

The dollar ban has been imposed on North Koreans since November 18, and foreign residents are required to convert their dollars by December 1, it said.

Beginning next month, the US greenback will no longer be used at hotels and in foreign-related shops and in payment for services in North Korea, a Korean Trade Bank official told Xinhua.

South Korea's unification ministry officials said Monday they had yet to verify the news report and North Korea's media was silent on the report. Dong Yong-Sueng, chief researcher at Samsung Economic Research Institute in Seoul, said Pyongyang's reported move reflected anger over the US-led decision to suspend heavy oil shipments from December to energy-starved North Korea.

"I see more of a political motive than an economic one behind the North's decision because US dollars are preferred to euros in international trade," Dong told the English-language Korea Herald.

Under a deal with the United States in 1994, North Korea agreed to freeze its nuclear activities in return for the US-led provision of two light water nuclear reactors and 500,000 tonnes of heavy oil a year.

But the deal has been on the brink of collapse since the United States revealed last month that Pyongyang had admitted to developing nuclear weapons in violation of the 1994 accord.

To punish Pyongyang, a US-led international consortium decided earlier this month to suspend fuel oil deliveries from December.

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