Some banks not yet finished Dong conversion into gold

Some banks in Ho Chi Minh city haven’t finished dong converstion into gold, Ho Huu Hanh, Director of the State Bank of Vietnam (SBV)’s Ho Chi Minh city told the VnExpress on June 28.

Volatile gold prices have made it difficult for local lenders to buy gold at good prices, while the given lead-in for gold conversion is too short, Hanh explained.

A Ho Chi Minh city-based bank’s director revealed that the lender already converted too much gold into dong, therefore it turned out a big problem to convert back.

“To avoid risks for the bank and keep gold market stable, we need more time to pick up the most suitable prices for the purchases”, he suggested.

Meanwhile, Asian Commercial Banks almost finished the conversion, said Nguyen Thanh Toai, the listed bank’s Deputy Director, assuring that the bank will meet the deadline.

Local physical gold traders said the volume of gold bought by the banks to balance the position is not much.

“It is likely that these lenders hae gradually bought gold. Therefore, the settlement of gold position at banks hardly affects the physical gold market”, said Nguyen Cong Tuong, Deputy Sales Manager of Sai Gon Jewelry Holding Company.

The SBV on April 29,2011 issued Circular 11 to ban local banks to convert gold value into the dong, deposit and lend the dong based on gold standard from May 1.

Gold funds that have been converted into the dong earlier must be reduced gradually and settled no later than June 30, 2011, it noted. – Stoxplus.com

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Jun 29 2011. Filed under Banking-Finance, Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry