The won is the official currency of the Democratic People’s Republic of Korea, more commonly known as North Korea. This decimal currency is subdivided into 100 chon. The name of the currency, which is the same as the South Korean currency, shares its origin with the Japanese yen and Chinese yuan: All three translate to “round-shaped object” in English. The North Korean won is issued by the Central Bank of the People’s Republic of Korea. For several years, up until 2001, the North Korean won was pegged to the U.S. dollar at the rate of 2.16 won: 1 USD. The reason for the peg was that the birthday of Kim Jong-il, the country’s leader, is February 16.
The North Korean won was introduced in 1947 as a currency to be used only for citizens. Separate foreign exchange certificates (FECs) were issued for use by tourists and visitors, red FECs for visitors from communist countries and blue FECs for visitors from capitalist countries. The currency was pegged to the U.S. dollar until 2001 in order to move the rate closer to that of the black market rate. The won was revalued in 2009, and citizens were able to exchange only a maximum of ₩450,000, which was about A$680 officially or A$83 on the black market.
The economy of North Korea is centrally planned and largely isolated from the rest of the world. Because of this forced isolation by the despotic regime of North Korea, the economy of the nation is considered nearly beyond repair. Several years of mechanical parts shortages have found the industrial sector without the means to fix or replace failing machinery, and food shortages have led to a decrease in the health and lifespan of the general population. If it were not for emergency food aid, the population would suffer from mass starvation. Most of the resources of North Korea are dedicated to military use, and black market prices have risen so steeply that most people have no means to purchase food or goods. The economy of North Korea will not improve until social and economic constraints imposed by the communist regime are lifted.