Time for the SBV to relinquish its gold bar-making monopoly

NA delegate Nguyen Phuong Thuy (Hanoi delegation) stated openly that the Vietnam gold market has experienced many instabilities.

"Hot topic" in NA’s session

SJC gold bars have always been too expensive (up to approximately 20 million dong per tael) compared to other gold bars and the converted world gold price. This surcharge has not only disappointed citizens and investors, but it has also irritated many National Assembly delegates.

During the third session of the 15th National Assembly's questioning session of SBV Governor Nguyen Thi Hong, NA delegate Nguyen Phuong Thuy (Hanoi delegation) stated openly that the Vietnam gold market has experienced many instabilities when there is a large premium between gold prices in Vietnam and the rest of the world, as well as between SJC gold bar prices and those of other brands. People get insecure as a result of this.

The reason for the said premium, according to Ms. Nguyen Thi Hong, is that the SBV has not imported raw gold to produce gold bars since 2014. "If necessary, the SBV has already made plans to intervene in the gold market. However, people do not buy gold bars in large quantities. It means that when the price of a gold bar is high, they sell it, thus gold price intervention is unnecessary", explained Ms. Nguyen Thi Hong.

However, Ms. Nguyen Thi Hong's response was unsatisfactory, prompting many National Assembly delegates, gold business enterprises, and individuals to remain concerned about the gold market's instability. Many people wonder if the price of SJC gold bars on the market today is manipulated or not.

Gold control is out of date

According to many analysts, the price of SJC gold bars has been exorbitantly high when compared to worldwide gold prices and other brands, despite the fact that SJC gold bars are the same weight and quality as other gold bars. This fact is due to the SBV's monopoly on gold bar production.

 The SBV's monopoly on gold bar production has resulted in the fact that SJC gold bars are substantially more expensive than other ones.

This ineffective gold bar management system has resulted in a supply-demand mismatch, resulting in a limit ed quantity of SJC gold bars in the market and an astronomically high price. People who want to own SJC gold bars are likewise afraid to do so since they are risk averse. Because of threats and a lack of a balanced supply of goods, Vietnam’s gold businesses must boost the price of SJC gold bars.

According to Clause 3, Article 4 of Decree 24/2012/ND-CP on management of gold business activities, the SBV has monopolized gold bar production, exported raw gold, and imported raw gold for manufacture. According to Decree 24/2012, "State" is a government authority with the function of State management, not a corporation. Even if the government is required to engage in some commercial operations, they must be carried out by state-owned companies rather than by government agencies.

The representative of the Vietnam Gold Traders Association (VGTA) stated that Decree 24/2021 should be amended or replaced as soon as possible so that the SBV does not monopolize gold bar production and does not use only one type of SJC gold bar as the exclusive brand, but rather licenses gold bar production to a number of qualified enterprises. Because the SBV is a government authority, not an enterprise, according to the Law on the SBV and the Ordinance on Foreign Exchange Management.... So it is no longer suitable to assign the SBV to make gold bars because gold bars are also goods. Furthermore, there is no central bank in the world that produces gold bars.

Assoc. Dr. Ngo Tri Long said, after ten years of fighting for the goldenization of the Vietnamese economy, Decree No. 24/2021 needs to be revised to reflect contemporary internal conditions and international integration.

"The gold standard is appraised according to the age of gold in many nations across the world. The quality assurance of 999.9 is acknowledged, and businesses are responsible for their gold bar brand." As a result, gold bar buyers have a wide range of options. It is past time for Vietnam to implement this regulation in order to protect gold bar purchasers", said Assoc. Dr. Ngo Tri Long.