The State Bank of Vietnam (SBV) will mobilise gold from the public and convert gold into money to fund socio-economic development projects, Nguoi Lao Dong newspaper cited a report of SBV.
In a report sent to the National Assembly to respond to Phu Yen residents’ proposal for banks to mobilise gold and foreign currencies from the public, the central bank has suggested solutions on gold mobilisation.
The amount of gold kept in local people’s coffers is estimated at 500 tonnes and worth billions of US dollars, which is a big source of capital. SBV should take measures to mobilise this gold volume to invest in production and business activities, contributing to socio-economic development.
According to SBV, between 2001 and 2008, commercial banks were allowed to mobilise gold and offer gold loans. During that time, gold prices were fairly stable, so banks could raise a considerable amount of capital for economic development.
But in the 2008-2011 period, the global economy’s uncertainty and the unstable global gold prices made domestic gold prices strongly volatile, putting both banks and borrowers at stake.
Gold mobilisation at the time led to gold speculation, worsening the so-called goldenisation and affecting the implementation of monetary policies in the period, says SBV.
Therefore, in 2011-2013, SBV carried out many comprehensive solutions to terminate gold raising and lending. Commercial banks were allowed to offer gold custody service only and charge customers for such service.
The termination of gold raising and lending and gold market management solutions have dampened the demand for gold bars and raised the amount of deposits in dong at banks. In 2014, sales of gold bars have plunged by 70 percent versus 2013.
There is no longer high demand for gold bars and gold speculation, so the exchange rates, the foreign currency market and the macro-economy are stable. Meanwhile, deposits in dong have annually increased 16-20 percent.
According to SBV, gold reserves among the public have been gradually converted into money to serve socio-economic development. Solutions to convert gold into money should be comprehensive and consistent.
The central bank has coordinated with relevant ministries and agencies to map out a plan to control goldenisation in the economy and to monetise gold for socio-economic development projects in the coming years.
http://english.thesaigontimes.vn/60047/SBV-seeks-to-monetise-gold-.html
