Gold imports resumption ‘timely’

State Bank of Vietnam Governor Nguyen Van Giau said the resumption of gold imports last week was a “timely move” to stabilize the domestic market.

It was the first time the price of gold surged although there was no shortage of gold in the country, Giau told a National Assembly meeting in which he answered questions from legislators Tuesday.

“After consulting many experts we announced the lift of the gold import ban,” Giau said. “It was a timely move, not late at all.” He said there had been no imbalance between supply and demand.

Vietnam banned gold imports in June last year to help narrow the trade deficit.

Sufficient supplies, legal loopholes

Gold supplies in the country were large, and the decision to lift the import ban was only to calm the market, he said. “In fact the amount of gold imported by traders after the decision has been very small.”

Responding to a question on the supervision over local gold exchanges, Giau said it was a “legal loophole” that no government agencies had been tasked with overseeing the exchanges.

Although some commercial banks were running gold trading floors, the central bank had not licensed any of them, Giau said, adding that he would seek guidance from the Prime Minister on this issue.

Commenting on speculation that the government might let the local currency fall further against the dollar, the governor said any devaluation in the dong would pose risks to the economy by causing foreign currency debt to grow.

National debt in foreign currencies is very large and corporate debt is not small either, estimated at around $17 billion, Giau said.

The governor however declined to answer to a question on forex hoarding by banks and businesses, saying “it is a big issue,” which he would report on to the National Assembly later.

Tags: Vietnam business news, Vietnam gold import