VietNamNet Bridge – It’s unfair to blame the non-SJC gold unsalability on the State Bank. However, it would not be unreasonable to affirm that the State Bank has to take responsibility for the chaos on the market.
The “price of the waiting”
To date, it’s still unclear how Vietnam should behave towards gold.
On July 3, hundreds of people were seen queuing in front of the Kim Son Gold shop in Tan Uyen District of Binh Duong province, waiting for their turn to sell gold back to the gold shop, following the rumor that the shop sold fake gold.
Just within one day, the shop had to spend 2 billion dong to buy gold back from people.
In an effort to stop similar rumors, on July 4, 2012, Deputy Governor of the State Bank Le Minh Hung, once again affirmed on local newspapers that once SJC is chosen as the national gold brand, this does not mean that non-SJC gold would be valueless. The State Bank would allow re-processing distorted SJC gold bars to ensure people’s benefits.
Nothing new was found in the statement by Hung. The statement just helped reassure the public and prevent the possible wave of rushing to sell non-SJC gold.
With the repeated statements by the State Bank about the behavior towards non-SJC gold, no one can say that the State Bank did nothing to stabilize the market which became chaotic because of the non-SJC gold problem.
However, no one can explain why the State Bank still has been keep hesitant to launch the SBV gold – the national gold brand (SJC gold would turn into SBV gold). With more than 80 percent of the market share, it would be easy to make SBV brand gold from SJC gold. The remaining question is how to deal with the other seven gold brands, existing for the last many years on the market, namely, AAA of Agribank, Phuong Hoang of Dong A Bank and PNJ, SBJ of Sacombank, ACB of Asia Commercial Bank, PNJ and Bao Tin Minh Chau.
All are waiting for the final decision from the State Bank, from the well-known gold brands, equipments and machines, workers to 300-500 tons of gold kept by people. Meanwhile, the waste of resources, the uncertainties of the market and the people’s confidence loss have been increasing every day.
It’d better to create a playing field for gold
Though the gold standard period is over, gold is still considered a shelter for people to hide in case of uncertainties, especially in the context of high inflation. Meanwhile, the current bad conditions of the world economy have given people one more reason to continue keeping gold. The Chinese provocation activities on the East Sea have raised the worry about the uncertainties in the region.
Most recently, three central banks (China, Eurozone and UK) have decided to loosen the monetary policies, which is considered the warning about the uncertainties of the global economy.
As such, Vietnamese people would still keep gold, even though when the State Bank imposes strict control over the market.
The State Bank of Vietnam instructed commercial banks to stop mobilizing capital in gold since May 1, 2011. However, the instruction has not been followed. Instead of accepting gold deposits, banks provided the service of “keeping gold for people” and paid interests to them. As such, the service users did not have to pay fee, but they even got money from the service providers.
The government decree on the gold market management has been promulgated, while the State Bank still has not released a circular guiding the implementation of the decree.
The State Bank has been urged to generate a playing field for gold. Gold should be considered as a kind of commodities for trade.