North Korea announced a redenomination on 30 November 2009 at one hundred old won to one new won, with old notes worthless after 6 December. It also capped how much each household could convert, initially 100,000 old won. The same country used the same ratio in 1959 with no limit at all.
Dropping zeros from a currency changes how a number is written and not what it is worth. Add one clause capping how much any household may convert, and the same operation becomes a transfer of wealth away from whoever was holding cash. North Korea has run the same conversion ratio twice, half a century apart, once without that clause and once with it.
Key Takeaways
- The 2009 conversion was announced on 30 November, with old notes worthless after 6 December.
- The ratio was one hundred old won to one new won.
- Each household was initially limited to converting 100,000 old won.
- Above that, a tranche was reported convertible at a tenth of the standard rate, and anything unconverted was worthless.
- A 1959 conversion used the same ratio with no limit, which is what isolates the ceiling as the variable.
The operation, and how little notice it gave
The reform was announced on 30 November 2009. New notes entered circulation on 4 December, and residents were required to convert by 6 December, after which the old currency was rendered worthless.
The ratio was one hundred to one, described as removing two zeros, so a one thousand won note was replaced by a ten won note. That much is independently attested: an American congressional research report of January 2010 records that the government issued new currency denominated at one hundredth of the old, and independent analysis published the same month says the same.
The speed was not for want of preparation. The new notes carry issuing years of 2008 for the higher denominations and 2002 for the lower ones, which means the series had been printed and held. What was compressed was the public's window, not the state's.
Dissemination went through the party rather than a gazette. Provincial officials were briefed, city and county party committee secretaries were convened on the morning of the announcement, and the news reached households through people's committees, neighbourhood office chiefs and local units.
The ceiling
The distinctive clause is the limit on how much any one household could exchange, and the best-supported figure is an initial limit of 100,000 old won.
That limit was then raised repeatedly through December, and here the record becomes genuinely unreliable rather than merely incomplete. The available accounts describe a sequence of revisions that do not agree with one another: a higher cash figure the following day, a further tranche convertible only at a penal rate, a deposit facility on unspecified terms, an allowance added per household member, and later figures expressed per person rather than per household. The most careful published treatment describes the sequence as producing endless confusion.
The honest position is that the initial ceiling is solid and no single revised figure is attested well enough to state. What is not in doubt is the direction: the cap started very low and was raised under pressure.
What happened to holdings above it
Three different things, in sequence, and none of them was conversion at par.
A further tranche of excess was reported to be convertible or depositable at one thousand to one, which is a tenth of the standard rate and therefore an administered loss of ninety per cent on that money. A deposit route existed above that, but on terms that observers could not establish: the rate, the right to withdraw and any interest were all unclear. Anything left unconverted when the window closed was worthless.
There was a further deterrent that no rule stated. Presenting a large sum identified the holder as someone with cash to explain, in an economy where accumulating it usually meant trading privately. The safest thing to do with money above the ceiling was frequently to do nothing with it.
Two institutional assessments describe the result in the same terms. Independent analysis published in January 2010 calls the limits confiscatory in terms, and characterises the operation as destroying excess cash wealth rather than taxing it. An American congressional research report of the same month writes that the currency exchange effectively became a device to confiscate wealth, much of it earned through private trade.
The comparison that isolates the ceiling
North Korea has converted its currency before, and the useful comparison is internal.
A conversion in February 1959 used the same ratio of one hundred to one, and reportedly set no limit at all on the amount that could be exchanged. A conversion in July 1992 was at par, but required holdings above a threshold to be deposited, withdrawable only over a period of years, and the deposits were reported to have been honoured only partly or not at all.
Hold those three side by side and the variable is not the ratio. The 1959 and 2009 operations share it exactly. What differs is whether a household's holdings were capped, and it is the cap that decides whether the exercise leaves people where it found them.
| Conversion | Ratio | Limit on the amount exchanged |
|---|---|---|
| February 1959 | 100 to 1 | None reported |
| July 1992 | 1 to 1 | Above a threshold, deposit only, over years |
| December 2009 | 100 to 1 | Initially 100,000 old won per household |
That is what separates a redenomination from a redistribution, and it is one clause.
What the state said it was for
Curbing private trade, on the only semi-official account available.
An official of the central bank gave an interview published on 4 December 2009 in which, denying that the measure moved the country toward a market economy, he stressed that socialist principles and order would be more solidly cemented in managing the economy, and said the market's role would gradually dwindle as more domestically produced goods were distributed through state networks. Internally, cadres were told the measure was necessary progress toward a national target set for 2012.
Read against the design, the objective and the instrument fit. Cash balances are what private trading requires in an economy with little banking, so a ceiling on cash falls hardest on the people holding it for that purpose. Analysts have gone further and argued the operation targeted market participants while compensating groups close to the state, but that is an interpretation by named authors rather than anything the state said.
Two related measures followed. Commercial transactions were officially limited during the conversion window, on the basis that goods would need repricing, and the use of foreign currency was banned on 28 December 2009.
What the record does not contain
It is worth being explicit about the evidence, because this subject has an unusually poor ratio of reporting to repetition.
No instrument is public. Formal decrees existed and were referred to at the time, but no text has been published, and the analysis that covers the episode most carefully notes that official sources largely remained silent, that embassies in Pyongyang were briefed verbally, and that the regime initially felt no need to explain itself to outsiders.
Almost every granular detail traces to a small number of Seoul-based informant networks, and the institutional accounts say so rather than obscuring it. That is why this guide states the initial ceiling and declines to state the revisions.
Two claims that circulate widely are left out here for the same reason. A reported apology by the premier rests on a single chain of unnamed sources, and the reported execution of the official held responsible rests on one agency report attributed to sources. The safer institutional version, published in February 2010, is that the government appeared to scapegoat him.
No further redenomination has been reported since. That was confirmed by an American research centre in 2018, and no institutional source through 2026 reports one, which is not the same as proof that none occurred.
Where to look next
The AUD to KPW page carries the reference series and a short block on why it is not a usable transfer rate. For the same operation done on ordinary terms, with a gazetted notice period and a dual-circulation window, why a country drops zeros from its money sets out what a redenomination costs when nobody is dispossessed by it. For a retirement of a currency with an exchange window that had to be extended repeatedly, the 180-day window that took 625 days covers that case. The ban on foreign currency that followed here has its counterpart in how a country uses two currencies at once, which sets out what it takes for foreign money to be in everyday domestic use rather than prohibited.
Sources
- Stephan Haggard and Marcus Noland, The Winter of Their Discontent: Pyongyang Attacks the Market, Peterson Institute for International Economics, Policy Brief PB10-1, January 2010 - the announcement of 30 November 2009, circulation from 4 December and the 6 December deadline after which old currency was worthless; the ratio and the removal of two zeros; the issuing years printed on the new series; the party dissemination chain; the initial household limit of 100,000 old won and the confused sequence of revisions; the penal conversion tranche and the deposit route on unclear terms; the description of the limits as confiscatory and of the operation as destroying excess cash wealth; the 1959 and 1992 conversions; the central bank official's interview of 4 December 2009; the limitation of commercial transactions and the foreign currency ban of 28 December; and the statement that official sources largely remained silent and that reporting traces to a limited number of sources
- Dick K. Nanto, North Korea: Economic Leverage and Policy Analysis, Congressional Research Service, RL32493, 22 January 2010 - independent confirmation that the new currency was denominated at one hundredth of the old, the characterisation of the exchange as a device to confiscate wealth much of it earned through private trade, and the ban on the use of foreign currency
- Marcus Noland, North Korea's Failed Currency Reform, Peterson Institute for International Economics, 5 February 2010 - the institutional characterisation that the government appeared to scapegoat the official held responsible
- Victor Cha and Lisa Collins, The Markets: Private Economy and Capitalism in North Korea?, CSIS Beyond Parallel, 26 August 2018 - that no comparable redenomination had been attempted since 2009, and the shift to policing market activity instead
- Daily NK, North Korea Replaces Currency, 30 November 2009 - the announcement date, reported the same day from in-country informants
General information about currency conversion and redenomination. Not financial advice, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.
Common questions
What did the 2009 reform actually do?
It replaced the currency at one hundred old won to one new won, removing two zeros. The reform was announced on 30 November 2009, the new notes entered circulation on 4 December, and residents had to convert by 6 December, after which old notes were worthless. Analysts noted that the new notes carry issuing years of 2008 and 2002, so the operation had been prepared well in advance.
What was the conversion limit?
The best-supported figure is an initial limit of 100,000 old won per household. The limit was then raised repeatedly during December in ways the available reporting describes inconsistently, and no single revised figure is well enough attested to state as fact.
What happened to money above the limit?
It could not be exchanged at par. A further tranche was reported to be convertible or depositable at one thousand to one, a tenth of the standard rate, and a deposit facility existed on terms that observers described as unclear. Anything not converted by the deadline was rendered worthless.
How is that different from an ordinary redenomination?
An ordinary redenomination is value-neutral: the same holding is rewritten with fewer zeros and nobody is worse off. A ceiling makes the operation redistributive, because it destroys or heavily discounts holdings above a threshold. Two institutional analyses of the 2009 operation, one American governmental and one independent, both describe it in those terms.
Had North Korea done this before?
It had converted its currency before, and the comparison is the useful part. A conversion in February 1959 used the same ratio of one hundred to one but reportedly placed no limit on the amount that could be exchanged. A conversion in July 1992 was at par but required holdings above a threshold to be deposited, and those deposits were reported to have been only partly honoured.