HA NOI (VNS)—Viet Nam's reliance on imports to meet gold demand led to the difference in domestic and global prices of the precious metal, said Deputy Governor of State Bank of Viet Nam Le Minh Hung.
He made the comment during a Government cabinet meeting in Ha Noi yesterday.
To curb inflation and stabilise the macro economy and exchange rate during the last two years, the State Bank did not grant licences to import or produce gold bars anymore.
Hung also attributed the price gap in domestic and world gold prices to a strong decline in global gold prices, the strongest in the last 30 years.
"Decree 24/2012/ND-CP on gold trading management came into effect in May this year and has helped to curb ‘gold fever', although a price gap remains," said Hung, adding that this was the key factor to ensuring macro economic stability.
Answering reporters' questions about gold auctions, Hung said the central bank had conducted gold auctions to ensure fairness for credit institutions and businesses who wanted to join the gold market.
The SBV successfully organised its 12th auction of gold bars, with a total volume of 12 tonnes of gold offered, he said. The gold auction raised the supply of gold to the market thus help minimise pressure on domestic gold demand.
Hung said this was a successful measure of the central bank, said Hung.
Hung also noted that under State Bank regulations, gold trading was not permitted to exceed 2 per cent of charter capital of a credit institution. Therefore, strong financial credit institutions were not allowed to use a larger amount of capital for gold speculation. — VNS