Central bank wants people to “melt gold to get Vietnam dong”?
30-10-2012 13:06:15+07:00
Central bank wants people to “melt gold to get Vietnam dong”?
It is estimated that 60 tons of gold has been sold, which is considered the result of a new policy on taking full advantage of the gold resource that the central bank attempts to pursue.
For a long time, people and analysts have been guessing wildly about the policies the State Bank of Vietnam would set up in order to mobilize the huge capital of 400 tons of gold from the public, after banks stop accepting gold deposits, slated for November 25.
Experts believe that the central bank “wants people to melt gold to get Vietnam dong,” which means it tries to encourage people to convert gold for dong, keep Vietnam dong instead of gold and put Vietnam dong into production or deposit at banks.
However, if the central bank really insists on going that way, if favorable conditions appear.
First, people would only convert gold for Vietnam dong when they feel safe when keeping dong. This can be obtained only when the inflation rate is curbed at reasonable levels, thus making the dong more attractive.
Second, it’s necessary to reduce the attractiveness of gold in the eyes of people, thus encouraging people to convert gold for Vietnam dong.
Regarding the inflation performance, experts say the high inflation rate has been curbed, while the dong/dollar exchange rate has been stabilized and the Vietnam dong interest rates have been attractive (the dong deposit interest rate is 7 percent higher than dollar deposit interest rate). This has led to a movement of selling gold for Vietnam dong.
In 2008-2010, the gold market regularly witnessed the gold price fluctuation, which prompted people to rush to buy gold to hoard up as their valuable assets. However, the long queue for buying gold now cannot be seen in front of gold shops anymore. Especially, people kept calm in the last two months, even when the gold price heavily fluctuated.
A report by the State Bank of Vietnam shows that commercial banks have reported the excess of gold purchase over sale of 60 tons over the last six months.
Since people decided to convert dollars for dong and convert gold for dong, the dong deposits at commercial banks have increased rapidly since the beginning of the year.
By October 19, 2012, the mobilized capital had increased by 14.02 percent in comparison with the end of 2011. Of this, the mobilized capital in foreign currencies had decreased by 1.55 percent, while dong capital increased by 17.52 percent.
As for the capital mobilized from the public, the mobilized foreign currencies had decreased sharply by 5.53 percent, while dong increased by 28.76 percent.
Analysts have affirmed that the high sale of gold (60 tons) and the movement of depositing Vietnam dong at banks both can show the rise of the local currency.
Regarding the measures to help ease the attractiveness of gold, experts think the State may decide to completely stop mobilizing gold from the public. If so, people would have to keep gold in their coffers, or leave it at banks and have to pay fee for gold keeping, instead of depositing gold at banks and enjoying interest rates for the gold deposits.
It’s very likely that the state management agency now thinks of proposing to impose VAT on gold, reasoning that gold is a kind of goods and it must be taxed like all other kinds of tax.
The agency may also think of imposing luxury tax, because gold is a kind of special commodity.
vietnamnet
