Draft gold trading decree needs to be reviewed
By Thanh Thuong - The Saigon Times Daily
HCMC – The draft decree on gold trading management needs to be reviewed as it is unable to facilitate the gold market to operate in an effective way, according to economic experts.
An economic expert told the Daily that the central bank had consulted economists on the draft before it was approved.
Most experts agreed that it is necessary to remove some regulations relating to gold jewelry trading or on-display gold products processing since these activities have almost no influence on the economy.
According to the specialist, the draft decree should focus on ensuring convincing needs of the public instead of tightening gold supply as regulated by the present draft.
He explained that local residents who are still thirsty for gold will be put at the greatest disadvantage if over 10,000 private gold traders have to stop operating in line with the draft decree.
Furthermore, the draft has yet to give out any solution to connect the local and world markets, something which has long forced local buyers to accept a price much higher than on the world market.
The big gap between local and international prices has created favorable conditions for smuggled gold to penetrate the domestic market, leading to the volatile exchange rate and destabilization of the economy.
Another thing is that the draft has found no way to lure the huge volume of over 500 tons gold from the public’s hands. This amount of gold would help the central bank replenish its gold reserve and stabilize the gold market accordingly.
Vo Tri Thanh, deputy head of the Central Institute for Economic Management, said the central bank is right to select SJC of Saigon Jewelry Holding Co. as the national gold brand.
However, Thanh insisted on a transitional period allowing local residents and firms to have enough time to get used to the change and suggested taking gold import quotas with tax tools to remove the so-called ask-give mechanism.
Since the central bank chose SJC as the national gold brand last week, investors have been rushing to buy SJC gold. Last week Saigon Jewelry Holding Co. sold out over 1.57 tons of gold, said Nguyen Cong Tuong, vice sales manager of the state-owned company.