After more than a decade of implementing a monopoly policy on gold bar production, the Vietnamese gold market is facing an important turning point. In a recent notable directive, General Secretary To Lam requested the removal of the state monopoly on gold bar brands - a move that experts believe will pave the way for the gold market to develop in a healthier, more transparent and competitive manner.
More competitive and transparent
At a working session with the Central Policy and Strategy Committee, the General Secretary emphasized that the State should continue to play a role in managing the production of gold bars, but it is not necessary to maintain a monopoly. Instead, it can license many qualified enterprises to participate in production, in order to create a fair competitive environment, thereby diversifying supply sources and contributing to market stability.
This directive is expected to overcome the gap between domestic and international gold prices that has persisted for many years. In fact, there was a time when the price of SJC gold bars was 15-18 million VND/tael higher than the converted international price, causing people to suffer heavy losses when buying gold for storage. The underlying cause stems from the monopoly model, namely Saigon Jewelry Company (SJC), the only state-owned enterprise assigned to export gold bars according to Decree 24/2012. However, since 2014, the supply of SJC gold bars has not been able to meet demand, while the State Bank has not imported raw gold for a long time.
This makes the supply of gold, especially SJC gold bars, increasingly scarce. Even when the market is in a "hot" state, such as in early 2024, with the State Bank pumping 14 tons of gold into the market through commercial banks and SJC, the supply is still seriously lacking. This shows that a market tightly controlled by a monopoly is a market that is prone to a state of supply-demand imbalance, which is not suitable for the requirements of modern market economic development.
Mr. Huynh Trung Khanh, senior advisor to the World Gold Council in Vietnam, said that ending the monopoly and allowing capable businesses to produce gold bars is only part of the necessary solution chain. Equally important is licensing the import of raw gold to expand the supply in a sustainable way. "If there is no raw gold, allowing production is just a formality," he said.
Many people expect the price of SJC gold bars to narrow the gap with the world gold price. Photo: LAM GIANG
Similarly, Dr. Le Xuan Nghia, former Vice Chairman of the National Financial Supervision Committee, affirmed that the gold market is in an "abnormal" state, when supply is almost non-existent, demand is still high, and the price of gold bars is pushed to an unreasonable level. According to him, if the import of raw gold is opened and the monopoly of SJC is broken, the difference between domestic and international gold prices can be reduced to a reasonable level, only 1-2 million VND/tael, equivalent to about 2%, mainly due to taxes and fees.
Not only does it stop at ensuring supply, a healthy market also needs a modern and transparent trading system. Experts also expect the State Bank to soon amend Decree 24 in a more radical reform direction, instead of just "patching up" the immediate loopholes. The recent Government Standing Committee meeting also agreed on the view: amending Decree 24 in a shortened order, in order to quickly create a legal framework suitable to the reality and requirements of market development.
From the perspective of a business directly participating in the gold market, Ms. Han Thi Binh, owner of Kim Phat I private gold trading company (HCMC), said that the demand for investment and accumulation of gold bars, as well as gold jewelry of the people is currently very large. Therefore, the state needs to expand the market, creating favorable conditions for people to be able to buy and sell gold in a more open and easy way.
Specifically, she proposed that the government soon allow businesses to import and export gold to ensure raw materials for the production of gold bars and jewelry, meet domestic consumption needs, and take advantage of export opportunities when market conditions are favorable. If businesses are allowed to export, they will earn profits in foreign currency, contributing to creating a significant source of revenue for the economy.
Open floor, collect tax, increase import
According to experts, opening the gold market does not mean loosening management. On the contrary, it requires strict control and systematization, especially through a tax mechanism and a transparent trading floor. According to economic expert - Dr. Dinh The Hien, it is necessary to soon build a clear tax mechanism for gold trading activities. This is not only a tool to regulate the market but also a method to make capital flows transparent.
"Currently, the domestic gold price is much different from the international price, but the state does not benefit, while a lot of foreign currency is withdrawn. If an import tax of 2-3 million VND/tael is applied, the state will not only have more revenue but also contribute to regulating the unreasonable gold hoarding mentality," Mr. Hien commented.
Along with tax policy, many opinions say that Vietnam needs to establish a national gold exchange, connecting with international exchanges, thereby promoting gold investment activities through accounts - a popular type in many developed countries.
Ms. Han Thi Binh suggested: "It is necessary to soon establish a gold trading floor connected with international gold exchanges to meet the demand for investment in non-physical gold. This will not only help reduce the pressure of buying gold bars and gold rings, but also limit the smuggling of gold, preventing the "bleeding" of foreign currency. At the same time, gold shops nationwide should be allowed to buy and sell gold bars to create more favorable conditions for people in transactions" - Ms. Binh suggested.
Mr. Tran Huu Dang, General Director of AJC Gold and Gemstone Joint Stock Company (Hanoi), expressed his hope that the State Bank would soon amend Decree 24 on gold trading activities in accordance with the direction of superiors.
He also proposed that the State Bank select a number of capable enterprises to take on the role of gold import and export and gold bar production. According to him, this will promote healthy competition, contributing to narrowing the gap between domestic and world gold prices. At that time, people can flexibly choose when to buy or sell, helping to balance supply and demand and limit gold price fevers like those that have happened before.
"The State Bank should establish a gold trading floor and connect with international gold exchanges, creating conditions for investors to trade gold through accounts. Accordingly, buyers will trade in USD and when selling, they will earn foreign currency, thereby contributing to balancing USD supply and demand in the market," said Mr. Dang.
No worries about foreign currency shortage
Vietnam does not lack foreign currency to import raw gold. According to Mr. Shaokai Fan, Asia-Pacific Regional Director of the World Gold Council, in 2024, Vietnam will earn up to 65 billion USD from trade surplus, foreign investment capital and remittances. Meanwhile, the demand for importing raw gold is estimated at only about 20 tons, worth 1.7 billion USD, a figure that is completely affordable.
Source: https://nld.com.vn/buoc-ngoat-moi-cho-thi-truong-vang-196250530215959867.htm
Comment (0)