North Koreans starving after currency move - reports

SEOUL (Reuters) - North Koreans are starving to death and unrest is growing due to a currency revaluation last year that crippled markets and led to the sacking of a senior cadre, reports said on Wednesday.

The news comes as the destitute North is under growing pressure to end its boycott of international nuclear disarmament talks, where it can win aid for reducing the security threat it poses in economically vital North Asia.

North Korean Workers' Party finance director Pak Nam-gi, who led the currency revaluation aimed at breaking up market activities in the socialist state, has been removed from his post, the Chosun Ilbo newspaper said quoting diplomatic sources in Beijing.

"Markets have come to a grinding halt following the currency revaluation and prices have soared," the source said.

North Korea last year announced a revaluation of its currency where old notes of its won currency would be changed for new ones at a rate of 100 to one.

The move was a further blow to the North's wobbly economy, which has also been hit by U.N. sanctions imposed after its nuclear test last year.

The currency revaluation was aimed at wiping out the cash holdings of a burgeoning merchant class, who risked exposure for illegal activities outside the centrally planned economy if they exchanged their old cash or deposited their wealth in banks.

The merchants traded in hard currency in China for food and items not properly provided by the central government. Imports ground to a halt after the currency revaluation and a separate crack down on foreign cash holdings.

The North's impoverished citizens have increasingly turned to markets for essentials not provided by the broken distribution system after a famine in the late 1990s that killed about 5 percent population.

After the currency moves, fewer goods were available for an already impoverished public and prices rose sharply.

Another leading South Korean daily, Dong-A Ilbo, reported ethnic Koreans on the Chinese side of the border as saying there have been reports of starvation in Sinuiju, a North Korean border city that has typically fared well because of trade with China.

There has also been rare civil unrest in the authoritarian state with North Koreans fighting security agents trying to stop people from smuggling or trading food, Daily NK, an online site run by activists, reported sources in North Korea as saying.

(Reporting by Jack Kim; Editing by Jon Herskovitz and Jeremy Laurence)