Experts urge mobilization of gold held by public
The demand for capital for investment and development remains high, but 500 tons of gold kept by the people, a huge source of capital, has been forgotten.
The Vietnam Gold Trading Association (VGTA) has repeatedly urged the State Bank of Vietnam (SBV) to consider mobilizing gold from the public for investment and development and setting up a national gold exchange.
According to Nguyen Thanh Long, chair of VGTA, Vietnam keeps importing gold while the export volume is very modest. The amount of gold kept in people’s coffers is estimated at 500 tons, a big source of capital.
“We propose the Ministry of Finance and SBV set up a task force to work on solutions to mobilize gold from the public,” Long said, adding that this is a necessary work to be done in the context of the ODA (official development assistance) decrease, while Vietnam is thirsty for capital for development.
Since 2011, when commercial banks stopped receiving deposits and lending in gold as requested by SBV, people have kept their gold in coffers at home.
Associations, businesses and the National Finance Supervisory Council have many times proposed the State Bank to consider using the capital for development.
With the gold price at VND34.2 million per tael on May 16, the amount of gold kept by the public may be worth $19.8 billion.
Tran Thanh Hai, chair of the Vietnam Gold Business cited reports by some institutions, including the World Gold Council, as saying that Vietnam consumes tens of tons of gold every year, while exports are inconsiderable.
This means that hundreds of tons of gold stay in Vietnam and the capital has not been used in the most effective way.
According to Hai, SBV and commercial banks could learn about mobilizing gold through trading floors in 2007-2010.
“The government now has to borrow capital from foreign sources by issuing international bonds at relatively high interest rates. But if it successfully mobilizes capital from the public, it can mortgage the gold and borrow money at lower interest rates,” Hai said.
Nguyen Tri Hieu, a renowned banking expert, also thinks that in the new development period, when Vietnam needs capital for development and foreign currencies in the context of thin forex reserves, mobilizing gold from the public is a solution to consider.
The central bank hesitates to mobilize gold from the public partly because it wants to fight against so called ‘goldenization’.
Decree 24 stipulates that State Bank is the only unit in Vietnam which can import gold and make SJC bullion gold.