The Central Bank of the Democratic People's Republic of Korea is

North Korea North Korea, officially the Democratic People's Republic of Korea (DPRK), is a country in East Asia. It constitutes the northern half of the Korea, Korean Peninsula and borders China and Russia to the north at the Yalu River, Yalu (Amnok) an ...

central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

. Established on December 6, 1947, it issues the

North Korean won The Korean People's won, more commonly known as the North Korean won (currency symbol, symbol: ₩; ISO 4217, code: KPW; ) and sometimes known as the Democratic People's Republic of Korea won (), is the official currency of North Korea. It is ...

. The Bank is subordinated to the

Cabinet of North Korea The Cabinet of Democratic People's Republic of Korea () is the supreme administrative organ of North Korea. The Cabinet's official newspaper is '' Minju Choson''. History In North Korea's first constitution, adopted in 1948, the executive po ...

. Since 2023, the president of the bank has been Paek Min Gwang. The bank served as the ''de facto''

commercial bank A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit. It can also refer to a bank or a division of a larger bank that deals with whol ...

of North Korea until the Kim Jong-un era, when financial and banking reforms separated the central bank from commercial functions.

History

In December 1945, the

Pyongyang Pyongyang () is the Capital city, capital and largest city of North Korea, where it is sometimes labeled as the "Capital of the Revolution" (). Pyongyang is located on the Taedong River about upstream from its mouth on the Yellow Sea. Accordi ...

branch of the

Bank of Chōsen The Bank of Chōsen (, ''Joseon Eunhaeng''), known from 1909 to 1911 as the Bank of Korea ( ''Kankoku Ginkō'', ''Hanguk Eunhaeng'') and transcribed after 1945 as Bank of Joseon, was a colonial bank that served as bank of issue for Korea under J ...

created a temporary monetary office, known as the "calculation office". On , the central bank of North Korea was created with use of all branches of the Bank of Chōsen on North Korean territory. In practice, that central bank was under the control of the

Soviet Armed Forces The Armed Forces of the Union of Soviet Socialist Republics, also known as the Armed Forces of the Soviet Union, the Red Army (1918–1946) and the Soviet Army (1946–1991), were the armed forces of the Russian Soviet Federative Socialist Republi ...

. It was complemented in April 1946 by the creation of a Farmers' Bank. However, the Soviet-controlled central bank failed to accomplish its objectives, being unable to meet its costs of operation, and its 100 million wŏn capitalisation proved to be insufficient,McCune, 2007, p. 194. and the North Korean Interim People's Committee opted to work mainly through the Farmers' Bank. On , the system was reorganized. 58 local banks were merged into the central bank, including North Korean operations of Japanese-era Korean banks headquartered in

Seoul Seoul, officially Seoul Special Metropolitan City, is the capital city, capital and largest city of South Korea. The broader Seoul Metropolitan Area, encompassing Seoul, Gyeonggi Province and Incheon, emerged as the world's List of cities b ...

such as Chōsen Commercial Bank, Chōsen Savings Bank, or Chōsen Trust. Simultaneously, control of the central bank was taken over from the Soviet forces by the North Korean government through its finance ministry. By 1947, the Central Bank and Farmers' Bank were the only two credit institutions in the country and together formed its

single-tier banking system A single-tier banking system is a policy framework under which all credit institutions coexist without distinction about the quality of their liabilities, or in other words, there is no distinction between central bank money and broad money. Thi ...

in line with the Soviet model. In June 1947, around 1,000 million wŏn was concentrated in the Central Bank, allowing it to extend credits totalling 900 million wŏn for economic rehabilitation.McCune, 2007, p. 195. The consolidation reflected a return to the original objectives of the People's Committee, which desired tight control over the North Korean economy. Any bank employees opposed to the changes within the system were removed from their posts. On , a comprehensive program of currency reform was announced. In 1959, the Farmers' Bank was merged into the Central Bank of the Democratic People's Republic of Korea, and the Foreign Trade Bank was established to handle the Central Bank's international business. Further state banks to deal with foreign exchange operations were created between 1987 and 1996. In 2011 the Central Bank building was torn down to make way for the newly constructed Mansudae/Changjon Street Area in celebration of Kim Il Sung's 100th birthday anniversary. The new site of the Central Bank building is located in the Ot'an-dong division of Chung-guyok.

Organization

The Central Bank has over 220 branches. It operates the Chŏnsŏng electronic cash card.

History

Organization

Presidents

See also

References

Further reading