Deputy Governor of the State Bank Pham Thanh Ha said that the State Bank proposed abolishing the state monopoly on gold bar production and issuing production licenses for gold bars to qualified enterprises.
At a meeting with ministries and sectors to discuss solutions for managing the precious metals market chaired by Deputy Prime Minister Le Minh Khai, who heads the Steering Committee on Price Management, Pham Thanh Ha, Deputy Governor of the State Bank (SBV), emphasized that among the synchronized solutions for managing the gold market under Decree 24 on business activities and gold management, the solution to abolish the state monopoly on gold bar production, gold ore export, and gold ore import for gold bar production is the most important to change the gold bar market landscape after 12 years of implementation.
According to him, the market instability period in the past, the “gold-ization” situation has been limited, and the fluctuations in gold prices have had less impact on the official exchange rate, the forex market, and the domestic macroeconomy.
Significant changes in the gold bar market after the implementation of Decree 24 include fundamental restructuring, orderliness, and discipline established in the market, and the business network for buying, selling gold bars has been thoroughly regulated…
However, there still exists a significant price difference between SJC gold bars and other types of gold bars, 99.99% jewelry gold, and international gold prices.
Despite the state monopoly solution being important for tightly controlling the supply source, since 2014, the SBV has not organized auctions to increase the supply of SJC gold bars in the market.
Therefore, after nearly 10 years, the limited supply of SJC gold bars on the market may be one of the reasons maintaining the high price difference between domestic and international gold prices.
Notably, according to Pham Thanh Ha, the SBV proposed changing the gold bar production plan, abolishing the state monopoly on gold bar production, and issuing production licenses for gold bars to qualified enterprises.
At the same time, the SBV will set production quotas for gold bars in each period suitable for monetary policy objectives and macroeconomic stability. Abolishing the state monopoly on gold bar production will be consistent with international experience, increase the supply of gold bars in the market, and solve the price difference issue.
Following the SBV’s proposal, opinions at the meeting suggested timely amendments and supplements to policies, a comprehensive assessment of gold market policies, management of SJC gold bar production molds.
Lieutenant General Luong Tam Quang, Deputy Minister of Public Security, said that the continuous fluctuations in SJC gold prices show many instabilities, not ensuring the stability of the gold market’s purpose. “Timely amendments and supplements to policies, with Decree 24 as the focus, are needed, establishing intervention mechanisms to stabilize the market, supplementing regulations on price differentials, and reevaluating the management of SJC gold bar production molds and managing this gold bar mold plan,” Lieutenant General Luong Tam Quang emphasized.
In conclusion of the meeting, citing fluctuating gold prices, the rate of increase in SJC gold prices managed by the SBV was higher than the global rate, and the price difference between domestic and international prices was also high. Deputy Prime Minister Le Minh Khai emphasized that without timely solutions to handle gold market fluctuations, it will affect economic recovery and development, major balances in the economy. This is an issue of great concern to the Government, government leaders, ministries, and sectors.
Deputy Prime Minister Le Minh Khai said, “The policy mechanism is very important, we must fully evaluate the impacts to propose amendments to Decree 24. The SBV continues to monitor the market, study opinions to perfect the content of the report submitted to the Government and Prime Minister for timely guidance.”
Deputy Prime Minister emphasized analyzing domestic gold prices with a high difference compared to international gold prices, which may lead to many consequences such as smuggling, fraud, complicating management at border gates, and putting pressure on foreign exchange.
Therefore, in the short term, the SBV will assess market supply and demand, gold price developments at home and abroad, units in the supply chain to have timely actions to handle the causes of market fluctuations.
In the long term, the SBV will evaluate the overall management solutions currently in place, especially the regulations in Decree 24, for timely adjustments, suitability.
“Whether to expand the issuance of gold bar production licenses must be carefully analyzed and evaluated for impacts on exchange rates, foreign exchange, macroeconomic stability, and public psychology. Policies must contribute to stabilizing the domestic gold market, macroeconomic stability, and forex markets,” Deputy Prime Minister Le Minh Khai emphasized.
