History of the Korean currencies
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 History of Korea |
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Prehistory |
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The history of Korean currencies dates back as far as 996, during the Goryeo Dynasty, when the first iron coins were minted.
During that period, even though some imported Chinese currency was also in circulation, commodity currency such as grain and linen continued in general circulation. In the 10th and 11th centuries, iron and copper coins along with silver vase-shaped coins were issued, but never widely circulated.
It was not until the beginning of the Joseon period that copper coins were minted for wide circulation. Jeohwa (저화/楮貨), which was made of standardized mulberry-bark paper early in the Joseon period, become the first legal paper money and was used as a medium of exchange in place of coins until it disappeared in the early 16th century. From the 17th century until the end of the 19th century, coins denominated in mun bearing the inscription Sang Pyeong Tong Bo (常平通寶) were the most widely circulated currency.
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[edit] Korean currencies
[edit] Mun (1633-1892)
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The First Manchu invasion (1627) and Second Manchu invasion (1637) interrupted the flow of metallic currency in Korea. But between those periods the government of the Joseon Dynasty issued its first copper coins.
[edit] Yang (1892-1902)
In 1888, shortly before the yang was introduced, a small number of coins denominated in hwan (圜) and mun (文) were minted. Even though the yang had been used in past it was reintroduced as the main currency in 1892. One yang was subdivided in 100 fun, making it the first Korean decimal currency.
The mintage and circulation of modern currency began during the last years of the old Korean Empire as a result of contact with the West. Around the time of the trial adoption of the gold standard in 1901, gold and silver coins were in circulation along with some Japanese bank notes.
[edit] Won (1902-1910)
The won was introduced in 1902, replacing the yang at a rate of 1 won = 5 yang. In 1909, the Bank of Korea was founded in Seoul as a central bank and began issuing currency of modern type. The won was equivalent to the Japanese yen and was replaced by the Korean yen in 1910. At the same time, Korean yen notes issued by Dai Ichi Ginko (First National Bank (of Japan), 株式會社第一銀行) also circulated.
[edit] Yen (1910-1945)
The yen was the currency of Korea during the Japanese occupation, from 1910 to 1945, and was issued by the Bank of Joseon It was equivalent to the Japanese yen and consisted of Japanese currency and banknotes issued specifically for Korea. It was replaced by the South Korean won at par when Korea regain its independence at the end of World War II.
[edit] North Korean currency
[edit] Won (1947-)
After the division of Korea North Korea continued using the Korean yen for 2 years until the Central Bank of the Democratic People's Republic of Korea was established on December 6, 1947 and a new currency was issued. It was at the time pegged at par to the Soviet ruble. It was revalued at a rate of one hundred to one in February 1959 and new won were issued.
In the following years the won faced some devaluation, caused by the subsequent devaluation and redenomination of the Soviet ruble.
Since 2001, the North Korean government has abandoned the iconic rate of 2.16 won to the dollar established in 1978 and banks in the country now issue at rates closer to the black market rate. However, rampant inflation has been eroding the North Korean wŏn's value to such an extent that currently it is believed to be worth about the same as the South Korean wŏn. In any case, the U.S. dollar and other currencies are still worth more in North Korean wŏn on the black market than officially.
[edit] South Korean currencies
[edit] Won (1945-1953)
Following the end of the Japanese occupation and the division of Korea the won was introduced to replace the Korean yen. The won was subdivided in 100 jeon. The first banknotes were issued by the Bank of Joseon in denominations ranging from 5 jeon to 100 won. In 1950 the currency management switched to the Bank of Korea and new notes were then issued, mostly with higher denominations.
The first note put in circulation by the Bank of Korea in 1950 was printed in Japan by the National Printing Bureau (国立印刷局). The next year the Korea Minting and Security Printing Corporation was created and took over as printer of South Korean currency.
At the time of the introduction in 1945 the won was pegged to the Japanese yen at a rate of 1 won = 1 yen. In October of the same year the anchor currency got change to the US dollar at a rate of 15 won = 1 dollar. Toward the end of the Korean War the won was devaluated at 6000 won = 1 dollar. Following that the hwan was introduced as the new currency at a rate of 1 hwan = 100 won.
[edit] Hwan (1953-1962)
Due to devaluation of the won the hwan was introduced on February 15, 1953 at the rate of 1 hwan = 100 won. It was subdivided in 100 jeon, but they were never used. New banknotes in denominations between 10 and 1000 hwan were issued. Starting in 1959, 10 and 50 hwan coins were also issued to replace the lower denomination notes. Those were the first circulating coins in South Korea.
Due to the short notice of the change in currency, the first serie of the new notes was commissioned from the United States Government Printing Office. The notes were released in five denominations, all with an identical design. Some replacement notes with a more suited Korean theme were later issued, starting with the 100 hwan just a month later.
The hwan suffered from inflation as well. At its introduction, it was pegged to the US dollar at 1 dollar = 60 hwan, but toward the end of its life it was devaluated at 1 dollar = 1250 hwan. In 1962, the won was reintroduced at the rate of 1 won = 10 hwan. The 10 and 50 hwan coins were kept in circulation until March 22, 1975.
[edit] Won (1962-)
After the devaluation of the hwan, the won was reintroduced at South Korea's currency on June 10, 1962.
At the time the South Korean currency was still pegged to the US dollar. It stayed so until December 24, 1997, when it became a floating currency, but was then immediately devalued at nearly half of its value because of the East Asian financial crisis.
[edit] References
- Kurt Schuler (2004-02-29). Tables of modern monetary history: Asia. Currency Boards and Dollarization.
- (Korean) 백과사전: 냥, Naver Encyclopedia
- (Korean) 백과사전: 환, Naver Encyclopedia
- (Korean) 백과사전: 원, Naver Encyclopedia
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