Eliminating monopoly is the 'cure' for transparency in the gold market

According to Mr. Nguyen The Hung, Vice President of the Vietnam Gold Business Association, it is time for Vietnam to have the same concept as other countries in the world : gold is a commodity, the State Bank should not directly manage the gold market, but only manage foreign exchange, regulate foreign currency flows, and at the same time play the role of managing national reserves, coordinating gold as an asset for national reserves, ensuring monetary security.

Mr. Hung shared that in the past, there were up to 10 gold bar brands in the country and there was no big price difference. Although SJC gold bars had the largest market share, people still had the right to choose other brands, when the price difference between the brands was only a few tens of thousands of VND/tael. Only when Decree 24 was applied and there was only the SJC gold bar brand did people have no other choice.

According to him, when the supply is free and there is equal competition, people will have easier access to gold, because there will no longer be a shortage.

“ People suffer when they have to buy gold at high domestic prices, different from the world prices. Not allowing the import of official raw gold also partly creates conditions for gold smuggling, which is difficult to control.

As for businesses that need raw gold to produce gold domestically, they do not know where to buy it. If they buy it illegally on the market, they are afraid of legal risks.

Another reality is that when the domestic gold price is higher than the world price, we cannot export. On the other hand, the 1% tax on the export price of gold jewelry is a huge cost for businesses ," Mr. Hung analyzed.

Removing the State monopoly on gold bars will help the market become transparent and connected with the world.

Also welcoming the direction of General Secretary To Lam, former Deputy General Director of Vietcombank , financial and monetary expert Nguyen Duy Lo said that it is necessary to eliminate the State monopoly on gold bars. Along with that, it is necessary to allow more enterprises to produce gold bars, expand controlled imports and study the application of taxes on gold trading transactions.

" Gold bar businesses must be allowed to import raw materials for production, then expand gold production according to State standards. For a long time, the State Bank has had a monopoly on gold imports. The market is scarce, so businesses must be allowed to import gold to expand the market and solve the scarcity problem, " said Mr. Nguyen Duy Lo.

He added: " This is aimed at a longer-term, more profound goal of stabilizing and making the gold market transparent. By doing so, the domestic and international gold markets will be connected, bringing prices closer together, not as different as they are now. People will also stop chasing the "gold price storm", making domestic gold prices less crazy ."

Although he believes that this work will certainly be difficult at first, he also affirms that it must be done and will be done resolutely.

Sharing the same view, economic expert Nguyen Minh Phong emphasized: “ The abolition of the gold bar monopoly will be linked to measures to ensure anti-speculation. Currently, when supply is limited, the demand for repurchase is high, leading to a situation where gold becomes an asset for investment and no longer a product for production and business.

Therefore, allowing businesses to import and trade gold from around the world is a correct spirit to avoid gold-ization of the market, turning the gold market into a form of speculative trading and surfing. This situation has lasted for many years, causing great damage to society, ” Mr. Phong commented.

Decree 24 has outlived its "mission"

Associate Professor Dr. Hoang Van Cuong (National Assembly Delegate of Hanoi) said that the monopoly on gold bars was established under Decree 24 in 2011 to combat the goldification of the economy, when many people used gold bars as a unit of payment for buying and selling vehicles, assets or borrowing.

At that time, Decree 24 was issued and implemented a monopoly on the production, trading, import and export of gold to avoid the phenomenon of free gold trading. The State monopolized the production of gold bars with national brands to supply gold to the market. " The issuance of Decree 24 had a very good effect in eliminating the use of gold as a unit of payment ," he said.

By eliminating the gold monopoly, the gap between world and domestic gold prices will narrow. (Photo: Minh Duc).

According to delegate Hoang Van Cuong, due to this monopoly, SJC gold is priced several million VND higher than other brands. This is unusual, because gold has the same value. In addition, due to the monopoly, the supply to the market is limited. At this point, when the economy is no longer at risk of goldification, Decree 24 is considered to have completed its "mission" and should be replaced.

According to Mr. Cuong, following the direction of the General Secretary, the authorities need to seriously implement the elimination of the gold monopoly, at the same time use tax policies to regulate gold import and export, manage gold, open up new business methods for trading through the floor and have many channels to mobilize gold. "This will ensure stability of the gold market and return the gold market to its true meaning," said Mr. Cuong.

How should businesses import gold?
Regarding regulations on managing businesses that are allowed to import gold, expert Nguyen Minh Phong said that all businesses with the need and ability should be allowed to participate in this activity, first of all, businesses that are licensed to trade in gold.
However, gold importing enterprises must prove that their foreign currency is obtained on a market basis and not using foreign currency from the State Bank.
Vice President of the Vietnam Gold Business Association Nguyen The Hung expressed his opinion that if the domestic gold market wants to circulate with the world, it must import and have a source of raw materials. If we want to import, we must issue quotas, and if we continue with the old mechanism of asking and giving, it will also make businesses suffer.
Therefore, we should not control the quantity of imports each year but should control whether the enterprise has foreign currency to import. Only then will the exchange rate be stable.

Vtcnews.vn

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