The State Bank of Vietnam (SBV) this year will be selling more than 30 tons of gold and importing a corresponding volume to help banks maintain their gold positions and meet market demand, said a source from the central bank.
Since late March, SBV has held auctions to supply gold to the local market. It was expected that some 20 tons of gold would be sold, thus meeting banks’ needs.
However, not only banks but citizens also have strong demand for the yellow metal. Nearly half of the 20 tons sold at auctions has found buyers.
Therefore, banks still need more than 10 tons of gold to return to their depositors. SBV will continue to auction gold to meet what banks need.
The central bank has spent some US$1.5 billion importing gold. Funding for gold import is sourced from the foreign reserves in order to avoid piling pressure on the exchange rate.
Recently, some banks have sold foreign currency to SBV, replenishing the supply.
The source from SBV said the local demand for gold was around 50 tons per year, but the ban on gold import had greatly affected gold supply in the past two years. Therefore, the gold volume imported recently has been selling well, but it is still much lower than in previous years.
The falling gold price in the global market has also led to the public holding on to their gold, the source said.
So far, only one bank has not finished closing its gold accounts overseas. It will do within this week.
As for gold mobilization and lending, a lot of banks have not finished settling their contracts.
The gold price has significantly dropped this year. So far, SJC gold has declined 12% in price.
This price drop has already been foreseen. Demand by individuals will keep surging as the gold price is on the fall, so the central bank will continue to supply the market until the demand slows down.
However, prudence must be taken when the gap between local and global gold prices is being bridged. If the price was brought down too low, demand would shoot up, making a gold fever recur.
Saigon Jewelry Holding Co. (SJC) yesterday quoted the precious metal at VND41 million per tael for selling, up VND150,000 over last weekend. The local gold price was VND5.7 million per tael higher than the global level.
Meanwhile, the U.S. dollar was quoted at around VND21,030, unchanged from last weekend.
(Sai Gon Times)