North Korea lacks both an effective financial system and an independent central bank, making its monetary policy simultaneously crude and difficult to manage. In general, prices are set by the regime, in line with traditional communist practice. The government's tendency to view policies through the lens of Marxist thought, ignoring the crucial role played by the limited (and often illicit) private sector, can result in serious errors of monetary policy. In December 2009 the latest of these mistakes was a botched currency redenomination that led to a period of runaway inflation. It is unlikely that the government has learnt its lesson from this incident, and further mismanagement of monetary policy can be expected in the forecast period.