Expert suggests abolishing gold im/export licences

Dinh Nho Bang, deputy chairman of the Vietnam Gold Business Association, talked with Tuoi Tre about ways to minimise negative impacts by rising gold prices and their effect on monetary policies.

He said storing gold is a common practice amongst Vietnamese in the context of high inflation and frozen stock and real estate markets.

The recent rising gold prices have strongly affected gold investors and those in other sectors.

People tend to switch to buy gold to store instead of depositing money in banks when gold price soars to earn bigger profits, he said.

Thus, a synchronised management on deposits, lending and exchange rates are a must to curb the negative impacts of the unstable gold price, he said.

He also suggested removing the licenses for gold imports and exports, saying such a license didn’t exist in countries like Thailand and India.

He said the removal would help balance prices between domestic and global markets, stop the illegal gold imports and exports, and contribute to narrow the trade gap.
“The government should encourage gold exports to earn foreign currencies as this is a quick way to reduce the trade deficit,” he said.

In June, the government ordered banks to strictly monitor the trading of gold bullion.

Speaking highly of this decision, he said it’s wasteful to have a large number of gold bullion in the market since a large amount of foreign currencies would have to be spent on importing gold to make such bullion.

In early 2010, the government ordered all of the gold trading floors to shut down due to lack of a legal framework.

Commenting on this, he admitted that the closure was necessary as both owners of the gold trading floors and traders were doing their transactions on a fragile foundation at that time.

He went on to suggest that a legal framework should be built to restore gold transactions via accounts.

“This will be an economic solution to reduce the number of gold bullion in the market and help the government collect more taxes from gold traders,” he said. – Tuoitre

Tags: vietnam gold, Vietnam gold exports, Vietnam gold market