Vietnam central bank to build national gold trading floor

The State Bank of Vietnam, the country’s central bank, is expected to open the national gold trading floor, the local newspaper Nguoi Lao Dong quoted Le Xuan Nghia, deputy chairman of the National Finance Supervision Committee, as saying.

The State Bank of Vietnam, the country’s central bank, is expected to open the national gold trading floor, the local newspaper Nguoi Lao Dong quoted Le Xuan Nghia, deputy chairman of the National Finance Supervision Committee, as saying at workshop in Hanoi.

The SBV’s official opinion was that it will allow only selective commercial banks to mobilize gold from the public but the gold deposit will be managed by the central bank. Selected commercial banks are allowed to issue tradable gold certificates. The central bank may pay certain fees to use banks’ gold deposits for reserve and market intervention if needed.

The move came out as the central bank was struggling to stabilize local market and create price parity between local and global market but Vietnam has not been able to produce gold yet, Nghia said.

Nghia believed that the policy will bring positive results and fit with current conditions as it will bridge local and global markets and pull down domestic premium.

Besides, account trading prevents dollar outflows, helps meet domestic demand, makes use of idle gold, clears speculation and price manipulation, prevents gold smuggling, and control the gold trading volume through quota on accounts.

At end-March, 2010 the central bank required credit institutions to close their international gold accounts. However, the domestic market was confronted with a gold shortage which has resulted in a significant gap between domestic and world prices.

Source Sophie/ News Writer/ StoxPlus

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

Posted by VBN on Oct 11 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry