Vietnam central bank opens more gold quota for local importers

The State Bank of Vietnam, the country’s central bank, on Sept 28, opened gold quota for more than 10 local importers in an effort to pull down local gold premium as it is now trading higher than the world gold price.

However, the specific quota for this time has not yet been announced. Earlier, SBV’s Deputy Governor, Nguyen Dong Tien, at the Government’s regular press conference of on Sept. 26, also declined to comment on the exact amount of gold previously imported as well as the quantity of gold licensed to each importer this time.

Some gold trading firms said that the central bank only allowed a limited amount to be imported and one even disclosed that it was previously licensed to import 300kg, which is now reduced to 200kg, equivalent to 5,000 taels.

Vietnam gold market strongly responded to the move, falling under VND44 million/tael at the open today, but it pared the early loss as the market progressed.

The central bank’s move aimed to narrow the gap between local and global gold prices and targeting the price parity among the two markets. However, the attempt has still been a failure so far as domestic gold premium rose back to VND4 million/tael or nearly 9% today from 7.8% yesterday.
As of 8:30 Hanoi time, Sacombank-SBJ gold was listed at VND43.61 million/tael -VND44.19 million/tael for bid and ask, respectively. As of 8:45 SJC in Hanoi was trading at VND44 million/tael and VND44.42 million/tael for bid and ask, respectively compared with the open prices of VND43.5-VND43.92 million/tael.

As gold price slips, demand for gold in the market on Sept, 28 recovers. Representative of SJC said that the company sold 9,000 taels but purchased only 1,500 taels.

The wide gap between local and global gold prices threatened the stability of forex market, analysts noted.

The SBV has licensed to import about 20 tons of gold YTD.

Source Scarlet D. I Analyst I StoxPlus

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