Abolishing the monopoly on gold imports and the monopoly on the national gold brand SJC will solve the problem of the large difference in SJC gold price compared to the world gold price. Experts have proposed this many times, is the State Bank slow to react?
Need to give up two 'monopolies'
Although the domestic price of SJC gold has cooled down, it is still much higher than the world price, about 14 million VND/tael. At one point, each tael of SJC gold was 18.5 million VND more expensive than the world price. Experts have proposed many solutions, including removing the monopoly on gold imports, as well as the monopoly on the national gold brand SJC.
However, up to now, there has been no official decision from the State Bank (SBV).
Sharing with PV. VietNamNet, Dr. Nguyen Tri Hieu, an economic expert, assessed: The State Bank of Vietnam reacted slowly. The expert said that the State Bank of Vietnam is the only unit that can import gold, and this agency does not want to give up that role.
“The State Bank imports gold, then assigns SJC to produce gold bars and recognizes SJC gold as a national gold brand. Those are two things that the State Bank is still holding onto,” Mr. Hieu wondered.
According to this expert, in a competitive market, monopoly always creates advantages and profits for them, because the monopoly unit can create supply, from which it can "manipulate prices". "The State Bank is the sole importer of raw gold and assigns SJC to produce gold bars, both of which are under the 'monopoly' of the State Bank. I also do not understand why the State Bank does not want to give up", he wondered.
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| Experts say that it is necessary to remove the monopoly on gold imports and the monopoly on the national gold brand SJC to stabilize the market. (Photo: Nguyen Hue ) |
At the press conference to deploy the banking sector's tasks in 2024 held on the morning of January 3, Deputy Governor of the State Bank of Vietnam Dao Minh Tu said: "The State also does not accept the difference in gold price with the world up to 20 million VND/tael as in the past, nor does it accept the price difference between SJC gold bars and other types of gold up to several million VND/tael".
Dr. Nguyen Chi Hieu said that this is contradictory when the leaders of the State Bank cannot accept the difference between domestic and world gold prices, but the State Bank has a monopoly on gold imports and a monopoly on the national gold brand SJC, which creates a large difference in monopoly gold prices.
He raised the question: How to balance the gold market, so that domestic and world prices do not differ too much? If all costs are taken into account, a difference of about 2 million VND/tael is acceptable. A difference of 2-5 million VND/tael is high and a difference of 5 million VND or more is very high.
“To keep the domestic gold price only 2 million VND/tael different from the world price, there is no other way but for the State Bank to give up the two above ‘monopolies’. It is necessary to allow reputable gold trading units with financial strength to import gold, so that the supply is abundant and supply and demand are balanced.
At this point, there is no need for the national gold brand SJC anymore because there is no longer a rush to buy gold, hoard gold, and price everything on gold, on USD... that is, the phenomenon of goldification has been prevented. Therefore, it is necessary for the market to have fair competitive products; it is impossible to declare a product as a national brand, while other products are not national brands," Mr. Hieu emphasized.
Abolishing monopoly, what are the risks to the market?
If the monopoly on gold imports is lifted, will the market face any risks? In response to this question, Dr. Nguyen Tri Hieu said that it could face too much import, too abundant supply, and push the gold price down very deeply.
Experts emphasized that in Decree 24, the issue of the State Bank's "monopoly" in gold import as well as the national gold brand SJC needs to change.
At the same time, a gold trading floor should be established so that all participants in the gold market can access updated information.
Meanwhile, speaking with VietNamNet reporter, Mr. Huynh Trung Khanh, Vice President of Vietnam Gold Business Association, advisor to the World Gold Council in Vietnam, said that if the issue was resolved soon, there would not be a difference of 20 million VND/tael between domestic gold price and world gold price.
According to the Vice President of the Vietnam Gold Business Association, the association has submitted a document requesting a license to import raw gold for 3 enterprises: DOJI Gold and Gemstone Group, Saigon Jewelry Company Limited (SJC) and Phu Nhuan Jewelry Joint Stock Company (PNJ) very systematically, within the framework of Decree 24 from August 2023 but has not been approved.
“Not allowing gold imports does not solve the problem. We need to solve the problem from the root, not from the tip,” Mr. Khanh affirmed.
According to Mr. Khanh, removing the monopoly on gold imports poses no risk to the market. The Association has proposed allowing the import of raw gold in moderation, under control.
According to vietnamnet.vn
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