NA’s deputy: gold, dollar trade tightening will only affect speculators

Dr Nguyen Duc Kien, Member of the Economics Committee of the National Assembly, believes that the government and the State Bank are following the right track when deciding to tighten the gold and dollar trade.

In a recent interview with local press agencies, Kien said that the gold and dollar trade tightening will only affect speculators, while it will in no way influence the majority of Vietnamese people, who have low and medium incomes.

Do you know that people felt anxious upon hearing the news about tightening the gold and dollar trade?

Who do you mean by “people”? They must not be the seven million regular state employees, not the 13 million workers in the fields of garment, footwear and seafood, who have a low monthly income of two million dong a month. I believe that the people who feel anxious about the tightening of the gold and dollar trade do not include tens of million farmers and millions of people who receive retirement pensions and social allowances. As such, the people you said “feel anxious” are just a minority. They are speculators, who surf on investments in the gold and foreign currency markets, an activity that is not encouraged because it causes uncertainties in the national economy.

However, it is undeniable that the demand for gold and dollar is a legitimate demand?

I have to affirm that to date, there has been no legal document which stipulates that the State prohibits people from purchasing gold and dollars. The State will never prohibit people from purchasing gold and dollars, but it requires people to buy and sell gold and dollars at the right addresses. The main goal of the tightening the gold and dollar trade is just to ask people to make transactions at the authorized traders.

Have you ever gone to the “authorized traders” – commercial banks – to purchase dollars?

As far as I know, commercial banks now satisfy all the foreign currency demands from people who need foreign currencies to study abroad or go abroad for healthcare.

How about the demand for foreign currencies to travel abroad or visit overseas relatives?

As the foreign currency reserves remain thin, Vietnam needs to prioritize providing foreign currencies to businesses to serve the importation of essential goods or input materials for local production, it is understandable why commercial banks still cannot satisfy all the demands for foreign currencies for traveling.

I wonder why travelers do not use payment cards when traveling abroad. The State does not prohibit payment cards. Is it because travelers do not want to make payment with cards, or they do not want other people know about their expenditures in foreign countries?

Currently, many people tend to buy dollars to deposit at banks, but it is now really difficult to purchase dollars?

People always think that the local currency will depreciate. It is true that the dong has lost some value against the dollar. However, it has not lost value against the local currencies of other regional countries. The State Bank has followed the right track and prohibited commercial banks from selling dollars to people so that people deposit dollars at banks. The move comes in line with the policy on fighting the dollarization. The policy has been pursued by all countries in the world, not only Vietnam.

But the demand for the dollar is a real demand. Therefore, if people cannot buy dollars from banks, they will seek dollars on the black market…

Why do people want to deposit in dollars instead of dong? It is because the dollar deposit interest rates are overly high, and much higher than the deposit interest rates in the US, the country that owns the dollar. It is so unreasonable. Therefore, in order to settle the problem, it is necessary to lower the dollar deposit interest rates. – Vietnamnet

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