Gold bullion ban a bad idea, warn experts
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Economists and other experts have urged the government to open up the gold market rather than restrict it as it has been doing for the last few months.
At a conference held in Ho Chi Minh City Monday to discuss a State Bank of Vietnam (SBV) proposal to become the sole buyer gold bullion and ban people from buying it, officials from the, relevant ministries, and gold trading firms warned the measure could even cause an adverse effect.
It is not judicious to manage the gold market in that way, Saigon Jewelry Company (SJC) chief Le Hung Dung said.
Prof Dr Tran Ngoc Tho from the Ho Chi Minh City Economics College said the government should not consider gold trading as the sole cause of the Vietnamese currency’s depreciation.
There are many other reasons affecting the exchange rate, he pointed out.
Gold prices have been unstable of late due to the domestic and international impacts of gold trading, he said.
Trading of gold bullion is a normal social and economic activity, he said.
Economist Huynh Buu Son said gold has long been considered both an asset and a “monetary unit.”
He said the government should focus on developing an organized gold market.
If a ban on trading is enforced, an “underground” market will almost certainly spring up, making it more difficult for the government to manage, he warned.
Dung said that if bullion trading is banned, the government should also ban the trading of jewelry since investors will turn to gold jewelry as an asset.
He suggested establishing a national gold trading floor managed by the SBV, saying in that case smuggling of gold and the black market will surely cease.
SBV governor Nguyen Van Giau said the ban is merely a suggestion now.
The central bank will study measures to both manage the gold market and protect people’s investments, he promised.
