Vietnam state bank authorizes more gold imports as prices soar

The State Bank of Vietnam has designated businesses that will be allowed to import additional gold in an effort to cool down the domestic price.

The bank said on Monday that gold price had dropped to its lowest level in weeks to just US$1,532.45 per ounce on global markets — from a record high of US$1,920 per ounce on Sept. 6 — leading to dramatic fluctuations on the domestic market. The result has been a domestic gold price that has remained for weeks much higher than the world price.

At the same time, the exchange rate between the Vietnamese dong and the U.S. dollar also spiked dramatically on the black market, rising to 21,300 dong per dollar, even as interbank and official rates remained at 20,628 dong and 20,834 dong, respectively.

The new gold imports, by increasing supply, were expected to help stabilize some of these fluctuations.

However, Nguyen Thanh Truc, general director of Agribank Gold Joint Stock Co., warned that gold traders would continue to be able to set their own prices without management from authorities, and some companies might continue to hold supplies back from the market, contributing to price manipulation.

By late yesterday, DOJI Gold and Germs Group was posting buy/sell prices of 45.05-44.6 5 million dong per tael, while the world spot price on the London Bullion Market was US$1,649.90 an ounce. The black market foreign exchange rate had also eased back to 21,270 dong per U.S. dollar.

Eximbank general director Truong Van Phuoc said that it was necessary to import more gold to cool down the overheated domestic market, noting that domestic commercial banks were holding a significant quantity of U.S. dollars, so the additional gold imports would not affect foreign currency reserves.

Individuals and organizations who wanted to do business in gold jewelry or artworks would be required to establish enterprises and meet several stringent requirements, he added. Meanwhile, the central bank has warned investors to be wary of speculation and manipulation when trading in gold.

Source Viet Nam News

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