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Central bank to allow additional gold imports
Nguyen Van Binh, governor of the State Bank of Viet Nam, announced this morning that he would allow more bullion imports if necessary to stabilise the overheated domestic gold market and to keep prices stable.
"Measures will be applied to control the distance between domestic and global prices, somewhere under VND400,000 (US$19.21) per tael," Binh said, adding that if the price disparity was allowed to widen it would encourage manipulation and speculation.
The domestic price is currently VND1-VND1.2 million higher than the global price.
This morning, bullion was traded at $1,903.70 per ounce on Kitco. One tael is equivalent to 1.2 ounces.
Sai Gon Jewellery Company (SJC), Bao Tin Minh Chau, Agribank Gold and Jewellery Company (AJC), Sacombank Jewellery Company (SBJ), Phu Nhuan Jewellery Company (PNJ) and Doji quoted prices ranging from VND48.55-VND49.09 million ($2,331-2,357) per tael.
Viet Nam is a major gold consumer. Most of the bullion in the country was imported. Diminutive gold reserves are unable to significantly affect the market, Binh said.
On August 9, the central bank set major gold dealers an import quota of five tonnes. About three tonnes have already come into the country to meet sudden strong demand, which has driven the domestic price up 3.6 per cent to VND46 million ($2,203) per tael that morning.
The State bank's move led to prices immediately falling to about VND45 million per tael, but the decline was only temporary.
Binh estimates that Vietnamese individuals and firms are holding 300-500 tonnes.
Each day for more than a week, the gold price has hit new highs, eventually reaching just under VND50 million per tael on the domestic market and $2,000 an ounce globally.
The Governor added that balancing imports and exports to stabilise the gold price was just a temporary measure. In the long run, the central bank plans to adopt comprehensive policies to stabilise the gold market and increase national reserves, he said.
The US dollar today is worth VND20,820 at banks and VND21,750 on the high street.
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