More than two-thirds of the National Assembly's question-and-answer session yesterday between delegates and State Bank Governor Nguyen Thi Hong revolved around the instability in gold market management.
Who benefits when gold prices fluctuate?
On the morning of November 11, at the question-and-answer session with the Governor of the State Bank of Vietnam (SBV), delegate Pham Van Hoa (Dong Thap delegation) said that people were very supportive when the state sold gold bars to stabilize the market. "But the bank only sells and does not buy, if people want to sell gold for cash, where can they sell? Gold sales only take place in Hanoi and Ho Chi Minh City, why not sell it nationwide to make it convenient for people when they need it?", the delegate asked.
Governor of the State Bank of Vietnam Nguyen Thi Hong
PHOTO: VNA
Responding to the delegates, Governor of the State Bank of Vietnam Nguyen Thi Hong shared about the strong fluctuations of the Vietnamese gold market, the solutions to intervene and stabilize the market such as organizing 9 gold auctions, selling gold directly through 4 state-owned commercial banks (CBs), etc. Thanks to that, the difference in gold price from 15 - 18 million VND/tael is now only 3 - 4 million VND/tael. However, according to Ms. Hong, the gold market will "continue to have complicated developments", while Vietnam does not produce gold, so the developments are very unpredictable.
Explaining why commercial banks only sell but do not buy gold bars, according to Governor Nguyen Thi Hong, the State Bank mainly implements measures to increase supply through selling gold, not buying it back. Not satisfied with the answer, Deputy Pham Van Hoa argued that if banks only sell but do not buy, it will lead to gold trading on the black market. "People keep selling but no one buys, while the amount of gold in the people is very large," Mr. Hoa stated.
For more information, the Governor of the State Bank said that buying or not buying gold can be due to many reasons, especially in the context of the fluctuating gold market, prices increase and decrease by the hour. Every business selling or buying gold from people will have to consider very carefully to prevent risks. "The State Bank always warns that this is a very unpredictable and complicated commodity, investing in this commodity will have certain risks," Ms. Hong said.
Meanwhile, according to Deputy Duong Khac Mai (Dak Nong delegation), the difference between world and domestic gold prices shows that the market is not stable, gold is racing to reach new peaks, making "people who want to buy dizzy, and management agencies have headaches". Mr. Mai also asked the Governor of the State Bank to propose solutions for people to give up the mentality of hoarding gold, and save resources for the economy. At the same time, clarify the reality when the price of SJC gold is different from the world gold price, who benefits, who loses when buying SJC gold.
Sharing with Deputy Mai, according to the Governor of the State Bank, "gold is also a headache for the world". Before the State Bank intervened, the international gold price was 2,300 - 2,400 USD/ounce, but now it has increased to 2,700 USD/ounce. Since the beginning of the year, the international gold price has increased by more than 50%. Although there have been many measures to intervene in the market, Governor Nguyen Thi Hong said that the gold price has not really stabilized. The State Bank will propose and advise on amending Decree 24 according to the anti-gold policy. Regarding "who benefits and who loses", according to Ms. Hong, "one person benefits, the other person loses". When trading in gold bars, businesses must also calculate so as not to take risks.
Discourage people from holding gold
Deputy Tran Thi Hong Thanh (Ninh Binh delegation) cited a report on the gold market, stating that one of the shortcomings and limitations is that people are not encouraged to sell gold to convert into cash to invest in production and business. "Gold among the people is dead gold, while the demand for capital for production and business is very large. I would like to ask the Governor to let us know what solutions we need to focus on in the coming time to make gold a resource for the economy?", Ms. Thanh questioned.
Delegate Pham Van Hoa, Dong Thap delegation
PHOTO: GIA HAN
I think this is a very good question, but according to Governor Nguyen Thi Hong, we are against gold and dollarization, so we do not encourage people to hold gold. The value of gold is very large, but when we hold it, it means that people cannot use that money.
Participating in the question and answer session, Deputy Prime Minister and Minister of Finance Ho Duc Phoc said that the high gold price was due to many reasons such as the increase in world gold price, supply being less than demand; the real estate market being frozen at a high level, and low bank interest rates, people do not want to deposit money. "Production and business are difficult, individual corporate bonds are risky. Gold can be a shelter for idle money," said the Deputy Prime Minister. Regarding solutions, Mr. Ho Duc Phoc said that he had directed that buying and selling must be legal and transparent, applying information technology to manage gold companies and shops; and having solutions to combat gold smuggling.
Carefully consider setting up a gold trading floor
Responding to Deputy Do Huy Khanh (Dong Nai delegation) about the establishment of a gold trading floor, Governor of the State Bank of Vietnam Nguyen Thi Hong said that some countries such as China have established gold trading floors. The positive aspect is market transparency, but establishing a trading floor requires investment in infrastructure. "The State Bank of Vietnam must coordinate with ministries and branches to research and assess the impact carefully to advise and propose to the Government at a time appropriate to the context and conditions of Vietnam," Ms. Hong said.Thanhnien.vn
Source: https://thanhnien.vn/ngan-hang-khong-mua-dan-biet-ban-vang-o-dau-185241112003655931.htm
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