The State Bank of Vietnam (SBV) will increase gold bullion supply in order to reduce the disparity between domestic and world prices as locals have rushed to trade the metal in recent weeks.
Increasing gold bullion supply is one of the solutions that the central bank will implement right away, the SBV’s Deputy Governor Pham Thanh Ha said Friday.
His statement followed Prime Minister Pham Minh Chinh calling for immediate steps to stabilize the gold market.
Ha did not explain how the SBV plans to increase the supply of gold bars.
In early 2013, the SBV had pumped gold via auctions, supplying over 60 tons to the local market. However, the domestic-world price spread had not reduced considerably as a response.
SJC-branded bar gold jumped to a fresh record of VND82-85 million ($3,383) a tael for bids and asks Friday morning at state-owned Saigon Gems and Gold Company (SJC), tracking a global surge.
The prices were VND12-13 million higher than international prices, narrowing from around VND18 million per tael seen last year.
The SBV holds a monopoly on SJC gold import and production.
Scant supply at home has been a factor behind the price hike in the country where people have long seen the precious metal as an investment haven.
The gold fever has prompted smuggling via border gates with Cambodia in southern Vietnam. Large amounts of U.S. dollars have been bought to finance gold smuggling, exerting upward pressure on the USD/VND exchange rate.
Ha said further that the SBV will also ensure raw material supply for gold jewelry and fine art items for export.
The central bank will coordinate efforts with relevant authorities to force gold shops to produce electronic receipts towards ensuring transparency and effective management.
Action will also be taken to strengthen supervision of gold trade and tackle cross-border gold smuggling, for which multi-agency inspection teams will be deployed this month.
On Decree 24, issued in 2012 to manage the gold market, Ha said that the SBV has reported relevant actions taken to the government along with amendment recommendations.