Central bank may set local gold prices

Central bank may set local gold prices

The State Bank of Viet Nam yesterday began gathering public comments on a draft decision to be issued by the Prime Minister to govern the sale and purchase of gold bullion on the domestic market.

Under the provisions of the draft decision, the State Bank of Viet Nam would buy and sell gold bullion as needed to stabilise domestic gold prices and would also, based on its monetary policies, buy additional gold bullion from other countries for the purposes of managing foreign reserves.

The central bank would also trade gold bars with commerical banks and exporting enterprises with relations with the bank.

Under the draft, the Governor of the State Bank would set buy and sell prices for gold bars on the domestic market, intervening to stabilise the market as needed. The draft would also make the central bank responsible for ensuring the stability of the foreign reserves when buying or selling gold.

The central bank would also be required to develop plans for buying and selling gold to regulate prices, including the timing and methods of purchases. Any purchases would be made through direct transactions or a bidding process.

Domestic gold prices always remain higher than global prices, with one tael (1.2 ounces) currently going for a disparity of VND3 million, although that has recently spiked to as high as VND5 million per tael.

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