A person holds gold bars at a store in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
The State Bank of Vietnam is ready to increase the supply of gold to stabilize the market, the head of its foreign exchange department said.
“We are ready to intervene to stabilize the market with an increase in the supply of gold bars from Saigon Jewelry Company (SJC),” said Dao Xuan Tan.
He was talking about bullion prices fluctuating in recent days around their new all-time high of VND80.3 million ($3,308.6) per 37.5-gram tael.
He said the surge in global prices also affected investor confidence in Vietnam and therefore prices would increase due to higher demand.
But people are not rushing to buy gold unlike in previous years, and some are even selling it, he said.
Vietnam issued a decree in 2012 to prevent “goldization”, a term used in the country to describe the preference for retaining and using gold as currency due to fear of currency depreciation.
The decree gave SBV a monopoly on gold production and contracted the Saigon Jewelry Company to manufacture bars. National gold prices are therefore different from global prices and are now around 30% higher.
But over the past decade, the central bank has not put new gold on the market, and the supply of bullion has only declined as a result of exports.
Gold sellers have been asking for permission to produce bars for years in vain.
