Decree 24 has not been amended after more than 12 years
Since 2012, the domestic gold market has been managed by Decree 24/2012/ND-CP on the management of gold trading activities.
Accordingly, the State Bank of Vietnam (SBV) does not allow businesses and credit institutions to import gold under licenses as before. This has contributed to stabilizing the exchange rate and limiting the production of gold bars through importing gold to sell for investment and gold bar storage needs of the people as before.
The State Bank also does not allow commercial banks to mobilize, lend gold, use gold as assets and put it on the balance sheet. Gold trading enterprises have also complied with state regulations on gold bar trading and have focused on developing the production of gold jewelry and fine arts according to the direction of the State Bank.
According to experts, when the gold market is unstable, affecting the macro economy , monetary policy should have Decree 24. It is undeniable that after applying Decree 24, the domestic gold market has become more stable, gold price "fever" no longer appears, and gold is no longer used as a means of payment.
According to experts, Decree 24 on gold market management needs to be amended to solve the problem of scarce supply. Photo: Minh Hien
However, after more than 12 years of implementing Decree 24, the gold market has encountered new problems. The gap between domestic gold prices (mainly SJC gold bars) and world gold prices is very high, at times reaching nearly 20 million VND/tael.
Since 2023, many experts have suggested that Decree 24 needs to be amended. The fact that SJC has been the only national gold brand for many years has created a monopoly, becoming the main reason why domestic gold prices have repeatedly been unreasonably higher than world prices.
However, to date this Decree has not been amended.
Recently, the Prime Minister requested the State Bank to amend Decree 24 in a concise manner, suitable to the actual situation and complete it this June.
At the working session on May 28 with the Central Policy and Strategy Committee on mechanisms and policies for effective management of the gold market, General Secretary To Lam requested to eliminate the monopoly on gold bars in the principle that the State still manages but can grant licenses to many qualified enterprises to participate in production.
The General Secretary emphasized that although the gold market management policy mechanism has been adjusted and supplemented positively, it is still slow to innovate. Current policies have not kept up with the development of the market and reality.
Gold market regulation is still limited
Sharing with VietNamNet reporter , Associate Professor, Dr. Nguyen Huu Huan, Senior Lecturer at Ho Chi Minh City University of Economics, commented that the regulation of the gold market in recent times still has many limitations.
“The limitation does not lie in the lack of control, but in the fact that policy priorities are leaning towards economic growth and exchange rate stability. To stabilize the gold market, the prerequisite is to ensure supply. However, domestic supply is currently very scarce, leading to many shortcomings. Therefore, it is necessary to solve the problem from the root,” Mr. Huan emphasized.
According to him, to thoroughly handle the supply problem, it is necessary to build new models such as gold trading floors or gold credit systems... This is the direction that can fundamentally solve the current problems.
Dr. Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council and former Vice Chairman of the National Financial Supervision Committee, said that the State Bank of Vietnam is responsible for managing the gold market according to Decree 24 and this decree is outdated.
"Without amending Decree 24, the Central Bank cannot arbitrarily violate this decree," Mr. Nghia emphasized.
Referring to a series of inspection conclusions recently announced by the State Bank Inspectorate, which revealed many violations at gold trading enterprises, Dr. Le Xuan Nghia said that the underlying cause stems from the mechanism. Specifically, Decree 24 prohibits gold imports and at the same time grants the Central Bank exclusive import rights since 2012, which limits the domestic gold supply, leading to an increase in gold smuggling.
“When gold trading companies are forced to buy gold from the market to maintain their operations, the authorities trace the origin, forcing businesses to find ways to deal with it, and from there violations arise. The problem lies in the lack of an official supply source. This is a mistake from Decree 24 itself,” Mr. Nghia emphasized.
Mr. Le Xuan Nghia proposed that it is necessary to allow free and official gold importation as per international practice, or to establish a physical gold trading floor. According to him, this trading floor will sell gold wholesale to wholesale buyers; then, these buyers will redistribute it to people and small shops licensed to trade in gold.
“This approach will ensure publicity and transparency. The Central Bank can control the amount of gold imported as well as the amount of foreign currency withdrawn from the system. Thanks to that, the gold market will no longer be manipulated or monopolized,” Mr. Nghia emphasized.
Vietnamnet.vn
Source: https://vietnamnet.vn/muon-on-dinh-thi-truong-vang-phai-xu-ly-tan-goc-nguon-cung-2407337.html
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