Vietnamese sees Gold as foreign currency
Gold, in fact, can essentially be considered a foreign currency here, because by nature Vietnam is a net gold importer.
Lack of inter connectivity for Vietnam's currency, the dong could be the reason for large price gap between global and domestic gold prices, SBV chief said.
According to State Bank of Vietnam governor Nguyen Van Binh, if the foreign exchange market is not interconnected, why should the gold market be interconnected.
The Vietnam dong has not been floated on the international foreign exchange market yet. As a result, the domestic and international foreign exchange markets are not interconnected, Binh said.
Gold, in fact, can essentially be considered a foreign currency here, because by nature Vietnam is a net gold importer.
Therefore, if the foreign exchange market is not interconnected, why should the gold market be interconnected, Binh asked.
People blame the central bank for letting the local gold price rise ever higher in comparison to its international counterpart, as they have misunderstood the central bank’s gold management policies, Minh said.
Stabilizing the gold market doesn’t necessarily mean that the price gap between the local and international price should be narrowed, he added.
The SBV’s decree No.24 on management of the local gold market set a target of stabilizing the market only, not stabilizing the gold price by closing down the gap.
Stabilizing the market here also means stabilizing the local gold price at a certain level, disregarding the world gold price trend.
That comes from monetary theory as well as the practical situation in Vietnam in the recent past.
Regarding the question of who will be the biggest beneficiaries from the gold management policy, Binh said they are the normal people, especially gold sellers, as they can sell at higher than the world price.
Previously, without the gold management decree, private firms, economic organizations importing gold for reselling or gold smugglers were the biggest beneficiaries, and they reaped profits from gold price fluctuations.
But now all gold trading activities undertaken by the state are meant to ensure that the entire difference between the domestic price and the world price of gold will be channeled into the state budget to reinvest in the economy and implement social welfare projects, Binh added.
Sumber : Google
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