N Korea 'bans US dollars'

North Korean authorities have told all holders of US dollar accounts in the country that they must change them into euro accounts by the end of this month.

Western aid organisations in the capital Pyongyang say they were given no reason for the move but it is believed to stem from the current stand off with the United States over North Korea's nuclear programme.

Reports in China's state media say the new regulations have already been applied to North Koreans who hold dollars in cash.

But some Western experts believe the idea stands little chance of success.

'Unrealistic change'

Despite North Korea's Cold War isolation, the US dollar has long been the currency used in the country, not just for international transactions, but also on a widespread basis in shops and markets within the country.

However foreign residents in the capital Pyongyang now say they have been informed by North Korean officials that starting from the end of this month all accounts and transactions currently in dollars must be conducted in euros.

They say that suppliers based in China sending goods to North Korea have been given the same instruction.

Residents say they believe the move stems from North Korea's anger at a US-led suspension of fuel oil deliveries to Pyongyang after the revelation that the country has been working on a clandestine nuclear programme.

However, one Western academic with long experience in the country said the use of the dollar was so entrenched, both in North Korea and the neighbouring countries with which it has dealings, that a switch from the greenback stood little chance of success.