Gold monopoly causes supply shortage, lawmakers say

By Dat Nguyen, Anh MinhOctober 24, 2023 | 05:00 pm PT
Gold monopoly causes supply shortage, lawmakers say
A person holds gold jewelry at a shop in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
The fact that the government holds a monopoly on gold has pushed its price much higher than the global rate and created a supply shortage, according to Vietnamese legislators.

There is shortage of supply on the gold market as seen by a gap between Saigon Jewelry Company (SJC) gold price and the global rate, said National Assembly member Nguyen Thi Yen from the southern province of Ba Ria – Vung Tau at a meeting Tuesday.

Since 2012, the manufacturing and management of gold has been placed solely under the State Bank of Vietnam (SBV), and SJC gold is the only brand that is recognized on the market.

This was done to stabilize gold and currency prices.

Lawmakers said that a tael of gold in Vietnam now costs VND14.5 million ($590.63) more than the global rate.

This is a large gap caused by a monopoly on importing and manufacturing gold, they added.

Regulations need to be changed to allow businesses to import and manufacture gold, Yen said.

A legal framework is needed to link Vietnam’s gold market with the world’s and to allow gold trading via exchanges, she added. "Vietnam needs a national gold trading exchange and authorities should issue gold bonds to mobilize gold from the people to ensure transparency."

Assemblyman Do Manh Hien from the northern city of Hai Phong said that an increasing number of people are investing in gold and dollars and they can gain profits two or three times that of bank deposits.

The government therefore needs to issue policies to mobilize gold and dollars from the public, he added.

In June last year lawmakers also brought up the matter of gold monopoly to question SBV Governor Nguyen Thi Hong, who said that any changes in gold regulations need to be considered carefully to ensure the country’s goal of preventing "goldization," a term used in Vietnam to refer to the phenomenon of keeping gold and using gold in payment due to fear of a dong depreciation.

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