[NEWS] - Boldly change gold management thinking

With regulations prohibiting the export and import of gold as well as the monopoly of the SJC gold bar brand, domestic gold supply and demand are always imbalanced. Many experts recommend the need to amend the regulations of Decree 24/2012/ND-CP to be consistent with current gold market management.

SJC gold price is sky-high

It is undeniable that Decree 24 has made an important contribution to combating "goldenization", and "dollarization" of the economy and enhancing the value of dong. After more than 10 years of implementing Decree 24, the situation of people rushing to buy or sell gold is no longer like before, the speculative psychology of gold hoarding has decreased. Up to now, the macroeconomy has been stable, inflation is controlled, and Decree 24 needs to be amended to suit reality.

Decree 24 stipulates that the State Bank (SBV) manages gold bar import and export activities, but since 2014, it has not licensed gold import for gold bar production. Therefore, the supply of raw gold is limited, and the domestic price of SJC gold is always expensive. At one time, the international gold price was up to 20 million VND/tael cheaper than SJC gold, causing domestic gold buyers to suffer because of SJC gold monopoly. Decree 24 was born when the world gold price was at 1,670 USD/ounce and the domestic gold price was about 42.5 million VND/tael. If previously, the difference between world gold and domestic gold was 2 million VND/tael, now there are times over 18 million VND, even nearly 20 million VND/tael.

Banking expert and lawyer Truong Thanh Duc said: It is not the gold price in the Vietnamese market that is different from the world market, but only SJC gold bars have this situation. “This is normal, easy to understand, by the law of market supply and demand. Because the State has a monopoly on the production of gold bars, this unique type of SJC gold bar was only minted once in 2013 and has not been further produced, so it has become a scarce branded item. Mr. Truong Thanh Duc said.

According to lawyer Truong Thanh Duc, no business is privileged to benefit from the price of SJC gold bars being more expensive than other types of gold, because it is a State-owned brand, not owned by the State. Saigon Jewelry One Member LLC - SJC. Therefore, businesses that trade gold bars are allowed to buy and sell SJC gold. “The high price of SJC gold is mainly due to psychological factors, not economic factors that affect supply and demand. People want to own this type of gold. When buying it, they have to pay a high price. When selling it, they get a higher price, even though it has the same weight and gold content as other types of gold," Mr. Truong Thanh Duc analyzed. accumulation.

To no longer have a monopoly

Immediately after Prime Minister Pham Minh Chinh’s telegram on gold market management solutions, a representative of the State Bank said it would study and amend Decree 24 on gold market management in January 2024.

Mr. Nguyen The Hung, Vice Chairman of the Vietnam Gold Business Association, said: The Prime Minister’s telegram directing the correction and stabilization of the gold market is very necessary and timely given recent gold price developments. Especially the phenomenon of SJC gold price having a large difference with the world price. If prices continue to fluctuate like this, people who want to buy and sell gold will suffer losses.

According to Mr. Nguyen The Hung, to no longer have a monopoly and push up the price of the SJC gold brand, Vietnam needs to allow gold jewelry manufacturing enterprises to import raw materials, considering gold jewelry as a normal business item, instead because it is a conditional business item like today.

Economic expert Ngo Tri Long emphasized: "To limit ’goldization’ and ’dollarization’ of the economy, we need to aim to develop a healthy market and limit gold speculation. It is necessary to boldly change the thinking of gold market management, thoroughly grasping management principles in a market economy. That is, the State Bank only performs the function of management and policy planning, regulating foreign exchange reserves in gold according to the Foreign Exchange Ordinance, Law on State Bank of Vietnam, and Law on Credit Institutions without participating in production, business, or regulation. market through administrative measures, not directly involved in the business of enterprises."

According to Mr. Ngo Tri Long, the State Bank should return gold to the market, that is, let the market - gold trading companies self-export and import, while the State Bank is only responsible for monitoring the volume. “It is necessary to increase supply to balance market demand. Decree 24 has the role of licensing gold imports from the State Bank and SJC production requires a license from the State Bank. I think that if we import gold and then process SJC to create a supply, the gap will be narrowed," said Mr. Truong Van Phuoc, former acting chairman of the Financial Supervision Committee. The State itself proposed.

Many opinions believe that, in the long term, not only for SJC but also for other gold brands, the State needs to have a policy to create a supply source, in addition to the amount of gold imported to craft and process fine arts that can be exported. Okay. Faced with the sharp increase in gold prices over the past few days, SBV leaders said they will continue to closely monitor developments in the gold market and prepare to deploy an intervention plan to stabilize the gold market. The State Bank advises people to be cautious when trading gold.

Faced with the sharp increase in gold prices over the past few days, SBV leaders said they will continue to closely monitor developments in the gold market and prepare to deploy an intervention plan to stabilize the gold market. The State Bank advises people to be cautious when trading gold.

Thanh Long (Collection source)