The Democratic People's Republic of Korea (DPRK) will scrap US dollars in daily payment and settlement soon, the state-run Korean Trade Bank said on Friday.

The new measure, which has been effective for DPRK people since Nov. 18, will be applied to foreigners from Dec. 1, according to a notification letter obtained by Xinhua.

Locals and foreigners should convert their US dollar accounts established at the Korean Trade Bank into euros or other currencies, the letter said, adding that their US dollar accounts will be automatically changed into euros if they make no declaration by the end of November.

All transactions with DPRK enterprises and units must be handled in euros or other currencies except the US dollar, the notice said.

The state-owned bank, which is in charge of foreign exchange business, also asked diplomatic missions and international institutions to use euros and other currencies rather than the US dollar when sending money into the country.

"Hotels, foreign-exchange shops and foreign-related services will receive no US dollars from the start of December," a staff member of the Korean Trade Bank said on condition of anonymity.

They must change US dollars in hand into euros and other currencies at the Korean Trade Bank before going to the foreign-exchange shops, she explained.

Formerly, the foreign-exchange shops received US dollars with an exchange rate of the US dollar against the Korean Won at 1:150.

The DPRK adopted the new measure as part of a political means to counter the pressure from the United States over the recent nuclear issue, commented a British diplomat who declined to be named.

The United States suspended heavy oil supplies to the DPRK on Nov. 14 after claiming that the DPRK was developing a uranium enrichment program in violation of the Agreed Framework reached in1994. The Bush administration flatly turned down a non-aggression treaty proposal put forward by the DPRK.

Under the agreement, the DPRK should stop its nuclear development program in return for two light water reactors and 500,000 tons of heavy oil a year from the United States.

Some observers said the DPRK adopts the measure in order to offset the continued devaluation of the US dollar, as the latest exchange rate of euro against the US dollar stood at around 1:1.002. The possible attack against Iraq will leave the US dollar to decline further, they said.

Sample euros in banknotes and coins were displayed outside the Korean Trade Bank. A poster also pasted there notifying local residents to change their US dollars in hand, but no deadline was fixed for the exchange.