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Time to return to hoarding gold
Commercial banks fear that under the pressure of high inflation people are now buying gold to keep under their pillows. They have every reason to worry about that: deposits at banks have decreased by several thousand billion VND, while $1.5bil has been spent in recent months to import gold.
Viet A Bank late last week announced it will raise interest rates for gold deposits to 4% per annum for 12-month term and 4.5% for 18-month term deposits.
Tran Thi Hao, living in district 3, HCM City, related that she bought gold last year and got the profit of 30% thanks to the gold price increases. Recently, as the gold price slightly decreased, she bought some more gold and decided to deposit all the gold she has at banks.
Hao said that the 4% interest rate for gold deposits proves to be attractive. If you make deposits in dollars, you will get 5.5% per annum in interest, but the dollar price will not increase as sharply as the gold price.
The director of a joint stock bank said that deposits at banks have decreased as big sums of money have been converted to gold. Therefore, commercial banks have been trying to attract capital in gold.
An official of Eximbank said that individual clients who keep their money in gold tend to make long-term deposits. Meanwhile, investors tend to make shorter-term deposits so that they can sell gold when prices increase.
At Asia Commercial Bank (ACB), people can make deposits with 0.2 taels of gold, while at other banks people have to make deposits of one tael at least.
In fact, few people choose to get loans in gold for fear of price fluctuations. Borrowers incur losses if the gold price increases by 10%, because in this case, it is more costly to borrow in gold than to borrow in VND.
ACB officials say that borrowers mostly are real estate traders who have earnings in gold and gold traders. Moreover, there are also clients who borrow gold to purchase houses.
Currently, in order to help clients avoid risks from gold price increases, banks provide financial instruments, including options. However, bankers say that the operation has not been used by many clients.
VNN
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