The North Korean government told its people on Monday that it was knocking two zero’s off the nominal value of banknotes, and North Koreans are "devastated" following these currency reforms that could wipe out their savings.
Ordinary people are reported to be desperately trying to buy as many goods as they can with the old currency while it is still valid. Under the new system, an old 1,000 North Korean won note will now be worth just 10 won.
Experts say this will increase officials' control over an already impoverished population, and reign in the activities of free markets that have sprung up across North Korea.
Yonhap quoted an interview the newspaper had conducted with a North Korean central bank official. The North Korean banker said international sanctions, natural disasters and the fall of the communist bloc had created economic hardship. This has forced the North to adjust its currency.
And there appears to be a limit on how much can be exchanged - one report says each adult can cash in only 100,000 won.( ie US$740)
Park Sang-hak, a North Korean defector now living in the South, said: "My contacts [in North Korea] called me to say North Korean people are in despair, crying and shouting - just like a war."
Writing in the Korean Herald, North Korean expert Rudiger Frank said the currency reform was a political move as much as an economic one. He said officials want to destroy the newly-emerging middle class, many of whom have made money trading in the free markets.