Vietnam PM confirms intention to end unofficial gold trade

The Vietnamese Prime Minister Nguyen Tan Dung reaffirmed that the government will seek to eliminate the unofficial trade of gold bullion and tighten controls over foreign currency transactions.

Illegal US dollar trading activities will be punished strictly, he said at a government meeting on Tuesday (March 15).

The government’s measures unveiled last month to tackle inflation and balance the economy has helped stabilize the currency and gold markets – a development Dung dubbed “a very positive sign.”

Existing regulations allow all Vietnamese to maintain gold holdings, according to an interview published last week on the State Bank’s website. In the interview, Nguyen Quang Huy, head of the Foreign Exchange Department, said that the government plans to gradually abolish black market gold trading. Gold holdings by the public will continue to be protected under the law, he added.

Local news website VnExpress reported that officials are drafting a decree that may limit gold bullion trade to one-way sales to the central bank.

Under the decree, the State Bank will buy gold from individuals and enterprises itself, or will appoint authorized agencies to do so.

“The purchase price will be determined by the international price to make sure it’s fair for the sellers,” VnExpress quoted an unidentified source as saying.

Vietnamese are holding between 300-400 tons of gold at home, the news site said, citing the Vietnam Gold Traders’ Association.

Since the government announced its plan to end unofficial gold trading on February 24, the price of gold in Vietnam has fallen 2 percent.

Following the announcement, the Tuoi Tre newspaper reported that talk about a bullion ban has inspired many consumers to buy gold rings, as a substitute. The rings, whose quality often varies, are repurchased by gold shops at a much lower rate than their selling price. – Thanhnien

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