Credit institutions asked to stop mobilizing and lending gold

The State Bank of Vietnam issued a circular on October 6 banning mobilization and lending of gold by credit institutions.

Under the new circular, a number of commercial banks meeting the central bank requirements will be taken into consideration, for conversion of part of the mobilised gold into cash, to supplement the gold supply in the domestic gold market in order to narrow the gap in price between local and world gold prices.

In addition, commercial banks will be allowed to open accounts in foreign countries to reduce the risk of adverse gold price movement. The overseas gold accounts will help reduce the gold price volatility for commercial banks in Vietnam.

The Circular came into effective from 6 October 2011.

Tags: vietnam gold, Vietnam gold market, Vietnam gold prices

Posted by VBN on Oct 8 2011. Filed under Banking-Finance, Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry