Vietnam's gold traders call for trading floor, rules relaxation

By VnExpress   November 2, 2016 | 04:36 pm GMT+7
Vietnam's gold traders call for trading floor, rules relaxation
Gold products are displayed for sale at a gold shop in Hanoi. Photo by Reuters

The central bank is urged to ease its grip on the gold market and imports.

The Vietnam Association of Gold Traders has proposed that the central bank relax its grip on the gold market and resume a plan for a national gold trading floor.

In Vietnam gold is often seen as one of the top savings and investment options. Between 2010 and 2012, in an attempt to take some of the pressure off the local currency, the central bank took several steps to control the gold market.

In 2010, it shut down 20 gold trading floors which were spinning out of control. The government said it was concerned about overleveraging as many investors were attracted by low interest rates and fast increasing gold prices.

In 2012, the central bank took full control of gold trading activities and began to manage Saigon Jewelry Company Limited, one of very few gold refiners that are allowed to import gold.

To reduce gold hoarding, the central bank has also ordered commercial lenders to stop taking gold deposits and lending gold to the public.

But according to the Vietnam Association of Gold Traders, it is time the central bank loosen its control over the gold market and gold imports, to strengthen the competitiveness of Vietnam’s financial markets.

Nguyen Thanh Long, chairman of the gold association, said without the central bank’s permission, jewelry makers would come to unofficial market for gold materials, which in turn would encourage gold smuggling.

Long added that the fluctuations in gold prices no longer have great impacts on the foreign exchange market and the dong/dollar exchange rate.

He said a national gold trading floor, which has been considered for years, would help attract gold savings from the public for the country’s development.

Related news:

Vietnam's State Bank to consider controversial gold trading floor

Disputed proposal seeks to strike gold on 'risky' trading floor