Two ways to drive public’s gold holdings to economy: market insider

Nguyen Thanh Truc, Agribank’s CEO and Vice Chairman of Vietnam Gold Traders Association, suggested two ways to drive the public’s gold holdings to the economy effectively, the online newspaper Dau Tu reported March 24.

Firstly, local commercial banks could attract gold deposits from the public and pledge them as collateral at foreign banks for dollar loans, Truc pointed out, adding that they could borrow about $4billion if raising 100 tons of gold deposits ($5billion).

“I asked some foreign lenders in Vietnam who agreed to accept gold deposits as collaterals to lend dollars”, he said.

Secondly, if local gold prices are cheaper than global ones, Vietnam could export gold deposits for dollars, and at the same time buy the same volume of gold on account to lock in the price with deposit rate of 7%. When the public’s gold deposits come due, they would buy back gold to return to them, he added.

The second way was applied by Agribank during 2007-2008 when Government allowed to import gold and trade gold on account, he noted.

To stabilize gold market, Truc suggested that Vietnam should cut tax on gold export to squeeze illegal gold trading across borders.

Currently, gold holdings by the public are estimated at about 500 tons ($25billion). – Stoxplus.com

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