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SEOUL, Dec. 1_(Kyodo) _ South Korea is trying to verify a report that North Korea has revalued its currency for the first time in 17 years, a Unification Ministry spokesman told reporters.

"With regard to the report, nothing has been verified so far. We, in cooperation with related agencies, are in the process of verifying whether the report is true or not," Chun Hae Sung said in a news briefing.

His remarks were in response to a Yonhap News Agency report earlier Tuesday that North Korea implemented the currency reform as of 11 a.m. Monday and the old currency started being exchanged for the new one Monday afternoon.

Chun said North Korea made official announcements when it implemented its two previous currency exchanges in 1992 and 1979.

Yonhap quoted unidentified sources as saying the exchange rate is 100 old won to 1 new won, meaning North Koreans have to replace their old 1,000 won bills with new 10 won notes.

The sources said the drastic currency revaluation appears to be aimed at tackling inflation and clamping down on black market trading.

"Many citizens in Pyongyang were taken aback and in confusion. Those who were worried about their hidden assets rushed to the black market to exchange them with (Chinese) yuan or U.S. dollars. The yuan and dollar jumped," one source was quoted as saying.

Since the North Korean government was founded in 1947, North Korea has also undertaken currency exchanges four times, Yonhap said.

Meanwhile, Daily NK, an online newspaper on North Korean affairs, said, "It looks like an attempt to control inflation, but it may have the side effect of making consumer reliance on dollars or yuan rise due to a loss of confidence in the value of the North Korean currency."

<<Kyodo News International, Inc. — 12/01/2009>>