SJC and banks to set up gold fund to intervene in the market

The State Bank of Vietnam (SBV) is working with a group of commercial banks and Saigon Jewellery Co (SJC) to devise solutions for problem of unusually surging gold price in the domestic market, Vietbiz24.com cited information source from SBV’s website on Tuesday.
Accordingly, SJC and banks will jointly create a gold fund to intervene the local market. The market intervention will be directed by the central bank whereby banks and SJC will sell gold at a certain price constantly till the gold price returns to suitable level.

At the same time, these organizations will be also allowed to open gold accounts in foreign countries to trade and balance with the volume of transactions in the domestic market with an aim to avoid losses caused by erratic fluctuation in gold prices.

As estimated, the gold fund of banks and SJC will have at least 20 tones (530,000 taels of gold), much higher than the gold import quota granted by the central bank for each phase. Therefore, the fund is said to have higher market stabilization capacity.

A source also said that the central bank will impose gold deposit rate ceiling at 0.5% per year to limit people to invest or hold gold.
Source: Vietbiz24.com

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

Posted by VBN on Oct 5 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