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Owning gold bars fine, but trading to be restricted
The people’s right to own and trade in gold is protected by the government but gold bullion can only be traded by government-appointed dealers, Deputy Prime Minister Nguyen Sinh Hung said at a meeting Thursday with the National Advisory Council for Financial and Monetary Policies.
Dr. Tran Hoang Ngan, a member of the Council, said it supported the government’s decision to ban bullion trading.
But since all the pertinent information has not been clearly publicized, it has caused panic, with many people wrongly thinking owning and trading gold bullion is to be banned altogether.
How will the government’s decision be achieved?
Firstly, the government will restructure the gold market so that we will have an organized network of importers and dealers.
There will be a government-appointed national gold company acting as an importer-exporter to guarantee that the gap between international and domestic gold prices will be bridged as much as possible, and a network of authorized dealers will work directly with the gold company.
The new network will prevent gold smugglers from destabilizing the market as they have done recently.
The network of authorized dealers, including banks and companies licensed by the State Bank of Vietnam, will be the place for trading gold. Gold trading will be a conditional business for which the licensing will be stricter, with existing gold shops only allowed to trade jewelry.
There is rumor that gold will be banned as a means of payment …
It is similar to the ban on using foreign currencies for payment we had in the past so that the prices of properties and goods will be in dong.
Since gold prices have been extremely volatile recently, people have stopping listing prices in the precious metal.
What decisions were made at the meeting about providing dollars for those who want to travel abroad for studying and treatment?
Banks will be allowed to charge a small fee on selling dollars for such purposes since it is unprofitable (For them) to trade the greenback at the listed price. That is the reason why banks have recently refused to sell the dollar.
Since the government is determined to scrap the dollar black market and reorient people towards trading the greenback legally at banks, this will be a chance for banks to regain their market share.
Are there any other measures to stabilize the forex rate and market?
The ultimate goal is to prevent the domestic market from becoming dollarized. So there will be both short-term and long-term solutions for this.
The short-term ones include curbing the dollar black market, curbing massive dollar lending within a short period of time to relieve the pressure on the exchange rate, and ordering state companies to sell the greenback to banks.
The long-term ones, aimed at reducing dollar hoarding and lending, include a ceiling interest rate on dollar deposits and ordering banks to raise the compulsory dollar reserve. This will prevent hoarding and depositing of the greenback, while lending in dollars will be costlier, thus making the dong more attractive for both depositing and lending.
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