Will the State Bank eliminate the monopoly policy on SJC gold bars?

In January 2024, the State Bank will submit a summary report on Decree 24, including proposals to amend and supplement a number of gold market management mechanisms to suit the new market context.

This is the sharing of Mr. Dao Xuan Tuan, Director of the Foreign Exchange Management Department, State Bank of Vietnam (SBV), responding to the press about opinions that it is necessary to amend the monopoly mechanism for producing SJC gold bars.

According to Mr. Tuan, recently, the State Bank has consulted relevant ministries, branches, associations, businesses and experts on the summary report and assessment of Decree 24.

"Since Decree 24 was issued, SJC Company is not allowed to produce gold bars. The State Bank only hires SJC Company to process gold bars when needed and this activity is carried out under the supervision of the State Bank," said Mr. Tuan.

The Director of the Foreign Exchange Management Department said that the overarching goal of Decree 24 is to manage the gold market to limit the impact of gold price fluctuations on exchange rates, inflation and macroeconomic stability; and to limit the “goldenization” of the economy.

In the coming time, the State Bank will continue to coordinate with the Ministry of Public Security and relevant ministries and branches to strengthen inspection and examination of gold trading activities.

"Currently, the State Bank of Vietnam is ready to implement a plan to intervene to stabilize the gold market by increasing the supply of SJC gold bars to the market. At the same time, the State Bank of Vietnam is summarizing and evaluating the implementation of Decree 24, in which it will propose appropriate solutions to manage the gold market," Mr. Tuan shared.

Assessing the recent developments of SJC gold bars, Mr. Tuan stated that although the demand for SJC gold bars has decreased compared to the period before Decree 24 was issued, market sentiment is still not completely stable.

"The reason for the recent increase in domestic SJC gold bar prices is due to psychological factors due to the upward fluctuations in world gold prices.

However, market monitoring shows that the volume of SJC gold bar purchases and sales has increased slightly, but there is no phenomenon of people rushing to buy gold like in the previous period. After increasing, the price of SJC gold bars has tended to decrease gradually since the afternoon of December 28, 2023. In the market, customers are tending to net sell SJC gold bars" - Mr. Tuan assessed.

According to Mr. Tuan, gold is a valuable asset and the price of gold often fluctuates strongly and unpredictably. Recently, the leader of the State Bank of Vietnam also sent a warning message to people to be cautious when investing in gold.

Source