Delegates questioned "banks only sell gold, not buy", what did Governor Nguyen Thi Hong say?

The current situation of gold fever, complicated developments and banks only selling but not buying gold were questioned and hotly debated by many delegates at the question-and-answer session with Governor of the State Bank Nguyen Thi Hong this morning.

How is the gold market stabilized?

On the morning of November 11, the National Assembly conducted a question-and-answer session on the first group of issues related to the banking sector. National Assembly Chairman Tran Thanh Man chaired the session.

Participating in the questioning, delegate Luu Van Duc (Dak Lak delegation) was interested in how the State Bank implemented the Government's directive to stabilize the gold market. How does the operator's management of the gold market affect the current and future gold price and market?

Đại biểu chất vấn — Delegate Luu Van Duc (Dak Lak delegation) questioned State Bank Governor Nguyen Thi Hong on the morning of November 11.

Responding to a German delegate, Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong said that the fluctuations in the gold market in Vietnam are also a common trend in the world.

The State Bank has advised the Government to issue Decree 24 and implement solutions to ensure supply/demand in the gold market since 2013.

From 2014 to 2019, the gold market was relatively stable and people's demand for gold decreased. However, starting in 2021, world gold prices increased, causing domestic prices to increase as well. At this time, the State Bank of Vietnam did not intervene.

But since June 2024, the international gold price has reached its peak, the difference between domestic and international gold prices is high, forcing the Government to give very strong instructions. The State Bank has also based on current laws and organized bidding. Through 9 bidding sessions, it shows that this is a quite effective solution in 2013.

"However, in the new context, gold prices are increasing very high, market expectations are rising, to narrow the gap between domestic and world prices, the State Bank has switched to direct selling through 4 state-owned commercial banks and SJC Company. Thanks to this method, the difference between domestic and world gold prices from 15-18 million VND/tael is now only 3-4 million VND/tael," said Governor Nguyen Thi Hong.

However, Ms. Hong added that the gold market is expected to be unpredictable and complicated, while Vietnam does not produce gold, so intervention depends on international imports.

"The State Bank will continue to closely monitor and issue policies to stabilize the gold market," said Ms. Hong.

Why do banks only sell gold and not buy it?

Questioning the Governor of the State Bank, delegate Pham Van Hoa (Dong Thap delegation) raised the issue that the recent sale of gold bars by the State Bank to stabilize gold prices has been widely supported by the people. However, the bank only sells and does not buy.

"If people want to sell gold because of the need to use cash, where can they sell it? If banks don't buy it, then other stores and shops won't buy it either. On the other hand, banks only sell gold in Hanoi and Ho Chi Minh City, why don't they sell it in other places in the country for people who want to buy it to make it convenient and easy?", Mr. Hoa asked.

Responding to questions, Governor of the State Bank of Vietnam Nguyen Thi Hong said that since 2014, the State Bank of Vietnam has not supplied gold bars to the market.

In the context of increasing demand, banks have increased gold supply but have not raised the issue of buying back. For state-owned commercial banks, when selling gold, the State Bank has implemented solutions to increase gold supply.

Currently, there are 22 credit institutions and 16 businesses trading in gold bars. These banks and businesses buy and sell gold normally.

"The reason why businesses do not buy gold from individuals may be for a number of reasons, such as balancing money," the female Governor explained.

Regarding the question of why gold bars are only sold in Hanoi and Ho Chi Minh City, Ms. Hong pointed out that the State Bank only grants licenses to businesses that buy and sell gold bars, but does not require any location, so businesses and credit institutions should consider and assess the demand in each province and city to open locations to buy and sell gold bars.

"Through our assessment, we found that the demand for buying and selling gold is mainly concentrated in Hanoi, Ho Chi Minh City and other major cities. In other provinces and cities across the country, there is no phenomenon of people lining up to buy gold," said Ms. Hong.

Is it risky for people to sell gold on the "black market"?

Realizing that the questioning of the Governor of the State Bank was not satisfactory, National Assembly member Pham Van Hoa continued to debate: "The State Bank sells gold bars but does not buy them back from the market, forcing people to sell gold in the "black market".

Delegates suggested that the State Bank consider buying back gold bars from people to facilitate them when they need to sell gold?

In response, the Governor of the State Bank said that regarding gold purchases, credit institutions themselves must comply with the State Bank's requirements to stabilize the gold market. When credit institutions buy gold, they must invest in equipment and human resources to identify and test the quality of gold. The State Bank will consider proposing solutions to handle this issue.

Currently, 22 credit institutions and 16 businesses buy/sell in many places, so not buying may be due to a number of reasons. Especially with the high volatility of gold, businesses must consider buying/selling to prevent risks.

For example, people buy gold at this price but when selling at a low price, people are at risk. Meanwhile, the State Bank has warned that gold prices fluctuate very complicatedly. If you invest in this item, you will be at risk and easily lose money when buying and selling.

When will the gold exchange be established?

Questioning the Governor of the State Bank, delegate Do Huy Khanh (Dong Nai delegation) raised the issue that currently, many developed market countries in the world allow the establishment of gold trading floors, attracting gold resources, bringing many opportunities for domestic investors.

"Does the State Bank have a plan to propose to the Government to establish a gold trading floor?", delegate Khanh asked.

Regarding this content, Ms. Hong said that some countries have established gold exchanges such as China established a gold exchange in Shanghai, but there are also countries that have not done so. Establishing a gold exchange has a positive aspect: transparent transactions, the buying and selling needs of people, businesses, and entities will be more convenient.

However, according to Ms. Hong, to establish a gold exchange requires investment in infrastructure. Vietnam is not a gold producer. Therefore, when gold is traded between entities in the market, it must also be imported from the international gold market.

According to Ms. Hong, to establish a gold trading floor, the State Bank will work with ministries and branches to carefully research and assess the impact to advise and propose to the Government at the appropriate time and in accordance with the context of Vietnam.

Private stores have difficulty proving the origin of gold

Delegate Tran Huu Hau (Tay Ninh delegation) pointed out that when establishing a business, gold trading units must be responsible for declaring capital according to regulations. Decree 20 requires them to comply with regulations on accounting regime, preparation and use of documents.

However, in reality, most gold trading establishments today are private enterprises upgraded from shops, with simple registration procedures. Meanwhile, many types of gold, especially assets left by ancestors, cannot be proven in origin.

Delegate Hau suggested that the Governor of the State Bank advise the Prime Minister to direct relevant ministries and branches to coordinate to remove these difficulties.

Responding to delegates, the Governor of the State Bank said that Decree 24 clearly stipulates the responsibilities of ministries and branches in gold market management activities. The field of accounting and documents is under the responsibility of the Ministry of Finance.

"The State Bank has taken note and discussed with ministries and branches to find appropriate solutions," said Ms. Hong.

Because the question involves many ministries and branches, National Assembly Chairman Tran Thanh Man requested the State Bank to respond to delegate Tran Huu Hau in writing.

Source: https://www.baogiaothong.vn/dai-bieu-chat-van-ngan-hang-chi-ban-vang-khong-mua-thong-doc-nguyen-thi-hong-noi-gi-192241111095019286.htm