The Chinese currency is becoming more popular in North Korea than the U.S. dollar as transactions through the renminbi make it easier to evade international sanctions against the North's nuclear and missile programs, a South Korean diplomat in Beijing said Monday.

Although North Korea, one of the world's most isolated nations, officially bans people from using foreign currencies such as the yuan or the greenback, the use of foreign hard currencies is rampant in the black market, the diplomat said on the condition of anonymity.

In the North's capital, Pyongyang, it is not uncommon for people to use the renminbi to pay for taxi fares instead of the North Korean won, the diplomat said.

"In the first nine months of this year, the value of the U.S. dollar was averaged at 7,500 won to 8,500 won, while the value of the Chinese yuan was averaged at 1,250 won to 1,350 won," the diplomat said.

"North Korean people and companies are increasingly using the yuan instead of the dollar, because such yuan transactions make it difficult for them to be exposed to the international sactions," the diplomat said.

The yuan's strength against the U.S. dollar is also one reason for the Chinese currency's popularity in North Korea, the diplomat said.

The growing popularity of the yuan also provided evidence of deepening economic ties between North Korea and China, according to the diplomat.

Between January and September of this year, North Korea's trade with China gained 4.4 percent from a year ago to US$4.69 billion, according to the data released by the China Customs Information Center.

The data, seen by Yonhap News Agency, showed that North Korea's exports to China jumped 9.4 percent to $2.09 billion during the nine-month period, while its imports from China fell 2.3 percent to $2.6 billion. (Yonhap News)