HCM CITY (VNS) — The State Bank of Viet Nam is implementing several measures to stabilise the domestic gold market, deputy governor Le Minh Hung told the media on Monday.
In recent days, gold prices in the domestic market have fluctuated and at times hit a record level of more than VND47 million per tael after 10 months, and was well above the global price by nearly VND3 million.
In light of the situation, the central bank met with the media to discuss the recent performance of the domestic gold market as well as the Government's measures to stabilise it.
On behalf of the central bank, deputy governor Hung said the gold market's recent fluctuations were mainly affected by changes in global gold prices caused by two major events that occurred recently.
The European Central Bank announced a plan to buy government bonds to help countries in the euro zone to overcome difficulties created by the debt crisis, particularly after the US Federal Reserve decided to loosen monetary policy to support the economy and were committed to keep interest rates low by at least 2015, according to Hung.
These factors have caused global prices of gold and precious metals to rise sharply, and the domestic gold price is expected to follow.
The deputy governor also said the domestic gold rate was strongly influenced by events occurring in the country in recent weeks.
Supplies on the market still increased since many investors who had bought gold at prices of between VND42 million and VND43 million per tael rushed to sell them to make profits when the gold rates reached an expected level, Hung said.
Because of this, from late last week to Monday the world gold price rose slightly but the domestic rate dropped and no signs of a gold fever were seen during this period.
In an attempt to stabilise the gold market, the central bank has applied several measures, one of which was to allow credit institutions that were facing difficulties in gold liquidity to borrow in gold.
The central bank also issued regulations on the organisation and management of gold bar productions that would allow credit institutions and enterprises involved in the gold-trading business to convert non-SJC to SJC-gold bars and reproduce damaged gold bars.
It has already asked involved units to report updated information on the number of non-SJC gold bars that need to be converted into SJC gold.
The central bank will continue to closely oversee the domestic gold market and apply proper measures to keep the market stable.
Hung warned that people should minimise their losses by being careful about trading gold. — VNS