|
SBV still has things to do to ease “goldization”
The gold prices have been decreasing, but the gold deposit interest rates have been increasing, which has made it more attractive to keep gold. Experts have warned that this would hinder the efforts by the State Bank of Vietnam to ease the “goldization”.
“Goldization” is the word modified in Vietnam which has been used to talk about the phenomenon of preferring keeping gold and using gold in payment instead of the local currency dong, because people always fear about the depreciation of the dong.
The gold price fluctuated heavily last week with the gold price dropping sharply from 45 million dong to 43.4 million dong per tael, which came contrary to the upward trend in the world. The dollar price in the free market has also decreased to 21,400 dong per dollar.
However, the exchange rates applied by commercial banks in the transactions with businesses now tend to increase again, which is believed to exceed the 21,000 dong per dollar threshold soon.
Analysts believe that the happenings are the results of the new policy of the State Bank of Vietnam to allow some commercial banks to sell part of the gold volume they mobilized from the domestic market and buy gold with their international accounts.
Gold price down, but gold deposit interest rate up
In order to have gold to sell to stabilize the market when necessary, commercial banks have to push up the gold mobilization and ensure their liquidity. Therefore, the commercial banks, which have been allowed to join the activities to stabilize the market, including ACB, STB, EIB, TCB and East Asia Bank all have raised the interest rates applied to gold deposit certificates.
At ACB, the gold deposit interest rates for 1-11 month term deposits are hovering around 0.95-1.3 percent, while the single rate of 1.5 percent is being offered by EIB. Other small banks such as Viet A and HD Bank have also raised the interest rates to 1.7-2 percent per annum in order to ensure stable liquidity.
As the gold deposit interest rates increase, it has become more attractive to keep gold. This, experts have warned, will encourage people hoard up gold and may make the central bank’s plan to ease the goldization failure completely
As banks believe that they can mobilize more gold when offering such high interest rates, they feel secure to sell part of the gold mobilized and then to purchase gold on international accounts.
According to Tuoi tre, commercial banks and the Saigon Jewelry Company (SJC), the biggest bullion gold producer in Vietnam, sold about five tons of gold on October 6. With the banks’ gold volume on accounts estimated at 112 tons, the gold volume sold by commercial banks last week was just equal to five percent of the gold mobilized by the banks.
Thanks to the banks’ sale of big volume of gold to the market, the gap between the domestic and the world’s prices has been narrowed significantly, from 4.5 million dong to 1 million dong per tael. However, the gap is still much higher than the expectation level at 400,000 dong per tael. This means that the commercial banks still have the opportunities to make profit by selling gold on the domestic market.
SBV urged to allow more banks to trade gold on accounts
Experts have warned that banks’ operation may not go smoothly any more, when the domestic price is no more higher than the international price. The five banks allowed to join the activities to stabilize the market, will have to sell gold, when the domestic price is higher by 400,000 dong per tael than the world’s price (The exchange rate used to calculate the gold price is the interbank exchange rate announced by the State Bank).
However, this proves to be not an easy thing, because the actual exchange rate could be higher than the interbank exchange rate. Moreover, no one can say for sure that the commercial banks will be able to buy gold on accounts at the prices lower than the prices, at which they sold gold on the domestic market. As such, if the banks take loss, the duty of stabilizing the market would not be fulfilled.
Therefore, analysts believe that it would be better to allow more banks to trade gold on account. This will allow to minimize risks and ensure that people can buy gold at reasonable prices.
vietnamnet, SGTT
|
