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Eased gold import quotas urged
Senior officials in HCM City have suggested that the central bank significantly ease restrictions on gold imports as well as the production of sheet gold in order to stabilise domestic gold prices.
They have also made suggestions on ways to stabilise forex rates and interest rates on bank loans.
The Vice Chairwoman of the city's People's Committee Nguyen Thi Hong said that the State Bank of Viet Nam could either abolish gold import quotas, or loosen the granting of gold import quotas for prestigious enterprises to reduce the gap between world gold prices and domestic rates.
She said the wide gap is believed to have spurred illegal imports of gold and destabilised the market.
In the interim, the central bank should also lift its sheet gold production quotas for enterprises licensed to import gold to ensure enough supply in the domestic market, she felt.
Hong also stressed the need for the central bank to allow enterprises to export international standard gold in order to avoid tax collection failures.
"At present, the Government has only allowed domestic enterprises to export gold jewellery with zero tariffs. When the domestic gold price was lower than the world rate, gold traders used 9999-fine gold bars for making jewellery for export, making huge profits, but the State could not collect taxes," she said.
Hong also asked the central bank to apply various measures to intervene in the foreign exchange market in order to meet importers'payment demands in the last months of the year.
She asked the central bank to strengthen inspections of commercial banks to ensure transparency in the supply of foreign currencies to meet enterprises' trading and production needs.
The gold and foreign currency market were sensitive areas that easily influenced people's minds, Hong said, urging the State Bank to update and present accurate information about policies regarding the banking sector so as to prevent the spread of rumours and panic.
Huynh Van Minh, Chairman of the HCM City Enterprises Association, said that banks'current lending interest rates of between 19 and 20 per cent per annum were too high compared with enterprises'repayment abilities, putting them in serious financial difficulties.
This was particularly true of small and medium-sized enterprises (SMEs), he said.
The central bank and the People's Committee should have policies and mechanisms to ensure that enterprises are able to get bank loans at interest rates similar to those before the latest fluctuations, Minh said.
He said priority should be given to enterprises involved in the production of goods for the Tet festival and import of essential materials.
To protect the domestic gold and foreign currency markets from strong fluctuations, the central bank and related agencies must have timely, clear-cut interventions, said Ho Huu Hanh, Director of the central bank's branch in HCM City.
Tran Minh Tuan, standing Deputy Governor of the SBV, responded to the proposals by saying the central bank would implement proper, timely interventions to stabilise domestic gold prices.
With the country's inflation rate estimated to be under 10 per cent by the year end, loan interest rates of between 18 and 20 per cent were irrational so measures would be taken soon to deal with this phenomenon, Tuan said.
The central bank would also exert further control over foreign currency trading activities at commercial banks, and ensure priority is given to enterprises participating in the government's price stabilisation programme, he added.
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