Vietnam central bank allows non-restrictive gold import to cut premium

The State Bank of Vietnam, the country’s central bank, will allow local gold traders to import gold and not set quantity limit to help cut local gold premium to global market, local newspaper quoted SJC official as saying.

“The central bank opined that it will keep intervening the market to make sure local gold prices stick to the world prices and the central bank will not limit gold import quota.” the local newspaper Tuoi Tre (youth) quoted an unnamed SJC’s official.

On August 22, the State Bank of Vietnam worked with Saigon Jewelry Company (SJC) to work out measures to close the gap between local and global gold prices and improve the correlation between the markets.

The central bank has licensed SJC gold import quota on August 22 to intervene local market.

Earlier on August 9, the State Bank of Vietnam permitted local companies to buy a combined of five metric tons of gold through August 31, to calm down local gold market and may let businesses import an additional five tons.

Vietnam is estimated to have exported 40 tons of gold this year, the governor Nguyen Van Binh earlier told local media.

Gold export has led to Vietnam’s trade surplus of $1.1 billion in July, first positive trade figure in 29 months. However, the August gold and gemstone export turnover fell 82% to $200 million.

In the first 8 months of this year, Vietnam is estimated to incur a trade deficit of $6.22 billion after exporting $60.8 billion worth of goods and importing $67.02 billion worth of goods in the period.

Gold import might worsen the country’s trade deficit and weaken the local fragile currency, the dong, analysts said.

The dong fell 1.2% in August, headed for the biggest decline since February, Bloomberg data showed. – Stoxplus..com

Tags: vietnam gold, Vietnam gold imports, Vietnam gold market