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SBV losing grip on gold, forex market?
Previous forecasts of the State Bank of Vietnam (SBV) on the local gold and dollar markets seem going off track, as the real situation continues to slip away from the central bank’s expectation.
The price of the US dollar on the black market reached VND21,800 a dollar by the end of Saturday, breaking its record-high rate of VND21,700 a dollar set on Saturday morning .
Compared to last week, the bid and ask price of the greenback on the black market increased VND280 per dollar and VND310 per dollar week on week.
SBV late last month devalued the local currency, the Vietnam dong, by raising the interbank rate for the greenback from VND20,828 per dollar to VND21,036 per dollar after leaving the rate unchanged since December 24, 2011.
The move came as no surprise to the local market, though the SBV announced in the middle of June that short-term demand for the greenback was the main reason for the dollar’s appreciation against the dong starting early June, and the situation would soon return to its normal state.
Meanwhile, the ask price of the greenback listed in local banks hit the ceiling at VND21,246 per dollar USD, and the bid price was at about VND21,220-21,230 per dollar.
The same situation happened to the local gold market.
Regarding the gold market, though SBV deputy governor told Tuoi Tre on June 30 that SBV predicted that the price gap between the local and international gold bullion will be narrowed starting July, the gap really retreated in a few day after that, and then continued to soar.
International gold price closed at $1,223.8-1,224.8 an ounce on Friday, down $28.7 an ounce following good news from the US labor market. Translated into local prices, it was a drop of around VND735,000 to some VND31.3 million a tael (1tael = 1.2 ounces).
But the local gold price rose VND200,000 a tael to VND38.3 million a tael during the period, bringing the price gap between the local and international gold bullion to a new record of VND7 million a tael.
During the past week, though the world price of gold fell more than 2 percent, the domestic gold price continuously went up. By the end of the week, domestic gold price increased VND900,000 per tael compared to the opening price on last Monday.
SBV last week sold some 120,000 taels of gold bullion, or 4,500 kilograms of gold, mostly to local bank so that the banks can have enough gold to close their accounts and return the precious metal to their customers if asked to do so.
A SBV official told Tuoi Tre that the central bank is trying its best to stabilize the gold market so that no single market actor/participant can act as a gold speculator and control the whole market.
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