NDO - According to the State Bank of Vietnam, from June 3 to October 29, this agency organized 44 direct sales of SJC gold bars, supplying the market with 305,600 taels of SJC gold (equivalent to about 11.46 tons), and affirmed that it will take measures to intervene in the market if necessary.
The State Bank of Vietnam (SBV) has just sent a report to the National Assembly deputies regarding a number of issues serving the question and answer session at the 8th Session of the 15th National Assembly. Accordingly, regarding the State management of the gold market, the head of the banking sector affirmed that in the past time, the SBV has organized the implementation of gold market management on the basis of closely following the provisions of Decree 24/2012/ND-CP on the management of gold trading activities, guiding documents and other relevant legal provisions; closely coordinating with ministries, branches and localities in the work of grasping, managing the market and handling violations.
Regarding the gold bar market, the State Bank has fundamentally reorganized, reducing the number of credit institutions and enterprises licensed to buy and sell gold bars to 16 enterprises and 22 credit institutions.
The gold jewelry and handicraft market has also been reorganized and rearranged, with the number of enterprises granted by the State Bank of Vietnam with a Certificate of Eligibility for Gold Jewelry and Fine Arts Production is 6,681 enterprises. “The business of buying and selling gold jewelry and fine arts is a conditional business activity that does not require a certificate of eligibility for business. Enterprises that meet the conditions for buying and selling gold jewelry and fine arts only need to register their business with the Department of Planning and Investment, and do not need to ask for permission from the State Bank of Vietnam. Since 2012, the State Bank of Vietnam has not granted a license to import raw gold to enterprises producing gold jewelry and fine arts. Enterprises must balance their own raw gold sources to produce gold jewelry and fine arts,” Governor Nguyen Thi Hong stated in the report.
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The State Bank has supplied 11.46 tons of gold to the market. |
Regarding gold price developments, the State Bank also said that domestic gold prices have fluctuated strongly in the same direction as world gold prices. From the beginning of 2024 to June 2024, the gap between domestic and world gold prices widened, especially for SJC gold bars. The gap between SJC gold bar prices and world gold prices at times reached VND 18 million/tael (May 2024). As of the morning of November 5, 2024, SJC gold bar prices were traded at VND 87/89 million/tael, an increase of VND 13.5 million/tael (about 18%) compared to the beginning of 2024.
Fluctuations in domestic gold prices basically depend on developments in world gold prices and supply-demand relations in the market as well as psychological and expectation factors. In addition to the above reasons, the State Bank believes that it cannot rule out the possibility of market manipulation, violations of relevant provisions of the law on tax, competition, etc., leading to a high difference between domestic gold prices (especially SJC gold) and world prices.
During the 10 years from 2014 to 2023, this agency did not increase the supply of SJC gold bars to the market. However, from April 2024 to present, the State Bank has intervened in the gold market through bidding and direct sales of gold bars to supplement the supply of SJC gold bars to the market, limiting the impact on the macro economy, currency, and foreign exchange.
Specifically, from April 19, 2024 to May 23, 2024, the SBV organized 9 auctions with a total winning volume of 48,500 taels (equivalent to about 1.82 tons). However, after 9 auctions, the difference between SJC gold price and world price remained high. In order to quickly control and reduce the difference between domestic gold price and world price, the SBV switched to the method of selling gold bars with appropriate volume, selecting 4 state-owned commercial banks and SJC Company to implement. As a result, from June 3 to October 29, 2024, the SBV organized 44 direct SJC gold bar sales, supplying the market with 305,600 taels of SJC gold (equivalent to about 11.46 tons of gold).
Before the State Bank announced the policy of selling SJC gold bars directly, the difference compared to the world price was more than 18 million VND/tael (about 25%). Since the official announcement of the direct sale of gold bars, the difference between the domestic gold bar selling price and the world price has decreased, currently only about 3-5 million VND/tael different compared to the world gold price (about 5-7%).
In addition to the above solutions, the State Bank also strengthens inspections and coordinates with competent agencies in provinces and cities (Market Management Department, Department of Science and Technology, Police, etc.) to inspect units engaged in gold trading activities, thereby rectifying gold trading activities. On May 17, the State Bank issued a decision to inspect 6 credit institutions and enterprises with gold trading licenses on compliance with legal policies in gold trading activities, including representatives from the Ministry of Public Security, the Government Inspectorate, the Ministry of Industry and Trade (General Department of Market Management) and the Ministry of Finance (General Department of Taxation), etc.
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The State Bank considers intervening in the gold market (if necessary). |
However, the State Bank also acknowledged that there is still a gap between domestic and international gold prices. The market is still not truly stable and sustainable, still affected by psychological factors, expectations, and potential risks affecting the currency and foreign exchange markets; people are not encouraged to sell gold and convert it into VND to invest in production and business. Notably, there are some gold jewelry products with a content of 99.99% used with properties similar to gold bars (excluding the raw materials for production from smuggled gold). This phenomenon can easily be exploited to reduce the effectiveness of the strict management of the gold bar market under Decree 24/2012/ND-CP.
In the coming time, to continue implementing the Prime Minister's instructions, based on the recent intervention situation and current legal regulations, the State Bank will consider intervening in the gold market (if necessary) with appropriate volume and frequency to stabilize the market and monetary policy objectives; coordinate with relevant ministries and branches to carry out inspection and examination of the activities of gold trading enterprises, stores, agents distributing and trading gold bars and other entities participating in the market; promptly detect loopholes and shortcomings to proactively, positively and effectively handle them according to their authority and report to competent authorities for appropriate and prescribed handling measures for issues beyond their authority.
At the same time, the State Bank will conduct a full review of the implementation of Decree 24/2012/ND-CP, propose amendments and supplements in accordance with the practical situation, contributing to preventing the goldification of the economy, not allowing gold price fluctuations to affect exchange rates, inflation and macroeconomic stability; enhancing the State's role in managing and regulating the gold market in accordance with regulations, ensuring economic security, financial security, national currency and social order and safety.
Source: https://nhandan.vn/ngan-hang-nha-nuoc-viet-nam-cung-ung-1146-tan-vang-va-can-thiep-thi-truong-neu-can-post843800.html
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