Discussing the socio-economic situation in 2023 and the first months of 2024, National Assembly deputies mentioned the high price of gold and the need for solutions to prevent negative impacts.
Delegate Pham Van Hoa, Dong Thap delegation
"Gold smuggling causes foreign currency to bleed"
Delegate Nguyen Thi Thu Thuy (Binh Dinh delegation) commented that due to the continuous increase in gold prices, gold and dollars have become the priority reserves of households and individuals. "If there is no early solution to control it, it will lead to the phenomenon of goldization and dollarization in social transactions," Ms. Thuy worried.
Delegate Pham Van Hoa (Dong Thap delegation) affirmed that there are still many shortcomings in gold market management. Gold prices fluctuate strongly, with a large gap between domestic and international prices. This leads to complicated gold smuggling, causing foreign currency loss, potentially negatively affecting macroeconomic stability.
Another reason for the high price of gold is because of the huge demand, people withdraw money from banks to buy gold. Low interest rates also lead to not being attractive enough for people to choose to deposit money in banks, instead they will buy gold reserves, as mentioned.
Faced with the above situation, Mr. Hoa suggested that there should be a long-term solution to stably manage the gold market.
According to him, the State Bank's gold auction is only a temporary solution. Gold prices have not decreased but tend to increase.
"Is it time to end the State Bank's monopoly on gold bars and gold imports?", Mr. Hoa asked.
The Dong Thap provincial delegate proposed amending and supplementing Decree No. 24/2012 on the management of gold trading activities, allowing enterprises to import raw gold and print gold bars. This will be done under the strict management of the State Bank.
"If so, I believe the gold market will stabilize, not fluctuate daily like it does now," Mr. Hoa hopes.
Prime Minister Pham Minh Chinh talks with State Bank Governor Nguyen Thi Hong in the hallway of the National Assembly.
"Underground market" of gold and foreign currency trading
In the socio-economic audit report for 2023 and the first months of 2024, the National Assembly's Economic Committee assessed that the gold market has many fluctuations, with the average domestic gold price index in the first four months of the year increasing by 20.8% over the same period, when world gold prices increased to a record high.
Some opinions say that, in addition to factors such as fluctuations in the world economic situation and geopolitical instability, some limitations in the management of gold and foreign currency trading activities have created an underground market without state control or statistics.
In addition, gold and foreign currency trading activities are large-scale, complex and difficult to control, especially the increasing preference for gold. The Economic Committee cited data from the World Gold Council (WGC, 2023) showing that in Vietnam, 81% of investors who have invested in gold said they would consider investing in gold again, a higher rate than China (72%), India (67%) and the world (45%).
In 2022 alone, Vietnam consumed 43 tons of gold, an increase of 37% compared to 2021, the highest in the ASEAN region.
The situation is so complicated but has not been adjusted appropriately, which may affect the management of the macro economy and market stability. The Economic Committee cited the Ministry of Public Security's assessment that the high difference between domestic and world gold prices leads to gold smuggling into Vietnam, increasing criminal activities, causing instability in social order and security, affecting monetary security, especially in border provinces.
According to monitoring reports, gold and foreign currency smuggling has been on the rise in recent years. Authorities have uncovered many large-scale cases, seizing dozens of tons of gold and many assets and US dollars.
A typical example is the project to destroy a gold smuggling ring from Cambodia to Vietnam through the Chang Riec border gate (Tay Ninh), 18 defendants were prosecuted for smuggling. The seized exhibits included 198 kg of gold, 59 gold bars, nearly 2.9 million USD; nearly 27 billion VND and vehicles and equipment. The total value of the seizure was equivalent to nearly 250 billion VND.
Continuing to expand the investigation, the prosecution agency determined that in August and September 2022 alone, the subjects smuggled more than 4 tons of gold.
Source: https://thanhnien.vn/dai-bieu-quoc-hoi-kien-nghi-bo-doc-quyen-vang-mieng-1852405291224538.htm
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