VietNamNet Bridge – Deputy Huynh Ngoc Anh of the National Assembly (NA) last Wednesday blamed the State Bank of Vietnam (SBV) for the wide gap between local and global gold prices, stressing that the central bank’s governor failed to work out the NA resolution.

Anh, who is deputy judge of the HCMC People’s Court, spent most of his time at the group discussion of NA deputies on Wednesday raising questions about the way SBV manages the local gold market.

“The Government’s report says that managing the gold market under the new mechanism contributes to macroeconomic stabilization. The report of the NA Economic Committee remarks such a way of management stirs up different opinions. The Government deems the new mechanism good. But what is the new mechanism?” he asked.

Public reaction reveals it is a monopolistic mechanism, he said. The stable exchange rate is a result of the stable economic situation, not a stable mechanism for gold market management, Anh clarified.

“The new mechanism for gold market management has led to the price gap,” he stated.

When speaking to the NA at the fourth sitting last year, the SBV governor promised to bridge the gap between local and global gold prices. It has been six months now and the results seem minimal compared to what citizens are suffering, he stressed.

In regards to gold import, he said over 10 tons of gold had been temporarily exported for re-import, bringing up a question as to which enterprises were granted quotas for gold import.

The gold for temporary export was non-SJC. The NA deputy asked where such an amount of gold had been mobilized in just a short time.

He wondered who enjoyed the difference created by the cost of temporary export for re-import of over VND1 million per tael, excluding the costs of processing and packaging.

He said: “The governor and the Government fail to adopt the NA resolution on bridging the gap between local gold prices and the world’s level.”

Since the NA sitting when SBV governor made his promise, 20 gold auctions have been conducted. The gold price gap from VND3 million has surged to nearly VND6 million per tael.

“SBV sets the bidding prices, so is there the so-called gold market? Or does SBV dominate the gold market?” he pondered. Anh deemed it necessary to find an answer to the question: who is the beneficiary?

As of the 20th gold auction held on Wednesday, the central bank had sold a total of 502,400 taels, or approximately 19.3 tons of gold. The purpose of gold auction is to provide banks with gold to settle their contracts before June 30, when all banks must stop lending and mobilizing gold.

Banks have almost settled their contracts, so demand has fallen in recent bidding sessions. However, local gold prices on Wednesday were still VND5-6 million per tael higher than the global average.

Source: SGT