Central bank to increase gold bar supply: deputy governor

By Quynh Trang   April 12, 2024 | 02:52 am PT
Central bank to increase gold bar supply: deputy governor
Pham Thanh Ha, Deputy Governor of the State Bank of Vietnam (SBV). Photo courtesy of SBV
The State Bank of Vietnam plans to increase the supply of gold bars to reduce the disparity between domestic and international gold prices, its Deputy Governor Pham Thanh Ha said Friday.

The central bank is prepared to intervene in the market with measures to stabilize it and intends to examine the gold trading activities of businesses and credit institutions over the last two years.

Vietnam in 2012 issued a decree to prevent "goldization," a term used in the country to describe the preference for keeping and using gold as a currency due to fear of currency depreciation. The decree gave SBV a monopoly on gold production and it has signed up Saigon Jewelry Company to make bullion for it.

However, over the past decade, the central bank has not issued any new licenses for gold bar production to the Saigon Jewelry Company, resulting in a limited supply of bullion. This scarcity has contributed to a significant price gap, with domestic gold prices staying approximately 15% higher than international rates.

To enhance transparency, the central bank will require gold businesses to generate electronic invoices for all gold transactions.

Starting this month, efforts will also be intensified to combat gold smuggling, profiteering, speculation, and price manipulation.

Additionally, the SBV will ensure there is sufficient raw material available for gold jewelry manufacturing, according to Ha.

Prime Minister Pham Minh Chinh has directed the SBV to act swiftly to bridge the gap between local and global gold prices. Currently, bullion prices in Vietnam exceed global figures by VND13 million (US$520.31) per tael of 37.5 grams, with the difference ranging between VND5.5-6.5 million for pure gold rings.

On Friday morning, the price of SJC gold bars reached a record high of VND85 million per tael, marking a 1.3% increase from the day before. Similarly, the price of gold rings rose by 1.2% to VND77 million per tael, where a tael is equivalent to 37.5 grams or 1.2 ounces.

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