Persistently fight against the gold-ization of the economy

At the question-and-answer session for the banking sector on November 11, gold market management and credit growth were the two issues that most delegates were most interested in.

Why do "Big 4" only sell, not buy gold?

People buy gold jewelry - Photo: TU TRUNG

Talking to Tuoi Tre, Mr. Ngo Tri Long - economic expert - commented that the State Bank's assignment of four state-owned commercial banks - the Big4 group including Agribank, BIDV, Vietcombank, VietinBank and SJC Company - to directly sell SJC gold bars to people is to stabilize gold prices. The purpose of this solution is to increase supply to the market and bring the difference in domestic gold prices closer to world gold prices.

"As for why these four banks do not buy back gold, in my opinion, the underlying nature of this solution is to limit people from buying and selling gold. If the policy makes it too easy to buy and sell gold, it is not advisable in the context of the economy needing to mobilize maximum resources from people and businesses for production, business activities, and infrastructure investment" - Mr. Long commented.

Meanwhile, the director of a gold trading company in Ho Chi Minh City said there are many reasons why the Big 4 group only sells gold and does not buy gold. In fact, many banks do not have gold trading operations.

"When the State Bank brings gold down for Big 4 banks to sell to people, the banks "by default" have a profit margin to cover operating costs (in the past it was 1 million VND/tael). But if the banks buy gold, it is a different story. At that time, they have to "reluctantly" trade in gold, then they have to balance the status (balance between buying and selling), how to handle it so as not to lose and to make a profit when prices fluctuate continuously", said the director of a gold business.

Besides, according to the director of this gold business, another reason is that fake gold is very sophisticated. If you only look with the naked eye, it will be very difficult to distinguish between real gold and fake gold because the design and weight are almost the same, both are 9999 gold. Even the differences that could previously help identify fake gold are gradually being surpassed."

Even professional inspectors are still "slipping through". Therefore, if many banks that do not have gold trading experience now participate in buying gold bars, it will be easy for fake gold to slip through, thereby allowing bad guys to "legalize" floating raw gold to gain huge profits. It should be noted that the difference between raw gold and SJC gold is sometimes 5-6 million VND/tael.

Gold floor and gold capital mobilization

According to experts, Vietnam has applied both of these forms but has not been successful, leaving many consequences that must be resolved later.

Gold exchange must close because many people... go bankrupt

According to a long-time expert in the gold industry, it is not advisable to set up a gold exchange because there are many risks for investors because the gold price fluctuates according to the world gold price and investors do not have enough experience and risk prevention tools like professional gold exchanges in the world.

Not to mention past experience shows that the activities of gold exchanges affect investors, banks and the entire economy.

In fact, Vietnam used to have a bustling gold exchange. But at the end of 2009, after many months of operation that left many major consequences for investors such as bankruptcy, losses, and exchange rate instability, the Prime Minister at that time ordered the closure of the gold exchanges.

"Setting up a gold exchange is not difficult, but managing and operating a gold exchange is a problem. In the past, gold exchanges were a very painful story and the State Bank had to work very hard to eliminate gold exchanges. Not to mention that the domestic gold market is not connected to the world. We cannot play our own game," said this expert.

Should we mobilize gold?

The banking system also used to mobilize gold but eventually had to stop mobilizing because most gold borrowers suffered losses due to the continuous increase in gold prices.

At that time, banks mobilized gold, partly lent it in gold, and many borrowers encountered difficulties due to the continuous increase in gold prices. The other part of the banks also "went through the roof" because they had sold gold to get VND to lend, and when they needed gold to pay people, the price was sky-high! At that time, the State Bank had to use foreign currency to import gold to sell to banks to mint SJC gold to pay people, causing great pressure on the exchange rate.

It took many months and a lot of foreign currency to stop gold mobilization in 2013. For more than a decade, the most effective form of gold capital mobilization has been to gradually reduce the amount of money poured into gold, instead of letting people use their money to buy gold and then have to find a way to mobilize that gold again.

Source: https://tuoitre.vn/kien-tri-chong-vang-hoa-nen-kinh-te-20241112081441136.htm