Over the past time, the regulatory mechanisms and policies for the gold market in Vietnam have been gradually improved, in which the State Bank of Vietnam (SBV) has proactively implemented several management solutions to stabilize the gold prices, contributing to maintaining the macro economy. However, in the context of complicated developments of the gold market, it is necessary to further improve the legal framework and enhance the management efficiency.
Mr. Dao Xuan Tuan, Director General of the SBV Foreign Exchange Management Department
Implementing the directions of the Party and the Government, the SBV has drafted a Decree amending and supplementing a number of Articles of Decree No. 24/2012/ND-CP. In order to clarify the new substances and the amendment orientations in the draft Decree, the Banking Times did an interview with Mr. Dao Xuan Tuan, Director General of the SBV Foreign Exchange Management Department.
Question: To improve the effectiveness of the gold market management, General Secretary To Lam has requested to improve the legal framework and revise Decree No. 24/2012ND-CP in the direction of marketization with a clear roadmap and strict control measures. Could you please tell us about the SBV’s intentions in implementing the General Secretary's request for the revision of Decree 24? Will issues related to the monopoly on gold bullion trademark and gold importation be considered and addressed in the revised draft Decree?
Answer: Rigth after the request by General Secretary To Lam, the SBV has promptly finalized the draft Decree, following closely the General Secretary’s guidance. Regarding the gold bullion market, the draft Decree sets out regulations aimed at terminating the state monopoly on gold bullion production, as well as the export of gold material and the import of gold material for gold bullion production. This is reflected through a new mechanism in which the SBV will grant licenses to qualified businesses and banks, allowing them to produce gold bullions, import gold material for gold bullion production, and supply gold material for gold jewelry and handicraft production.
Based on the macroeconomic and monetary developments, the monetary policy objectives and the gold market developments in each period, the SBV will grant appropriate quotas for importing gold material to the qualified businesses and banks (hereinafter referred to collectively as the businesses). This method will ensure not only the termination of the State monopoly but also a strict control over the gold bullion market in both production and importation of gold material.
The supervisory and regulatory mechanisms of the State are also reflected through the regulations requiring the businesses to provide information on the applicable standards for their gold products, developing internal regulations for gold bullion trading, maintaining accurate transaction records, and providing relevant data to the competent authorities,…
Accordingly, there will be more gold brands of new businesses and banks licensed by the SBV in the market. In addition, the draft Decree also includes new regulations for payment via bank accounts, and the use of electronic invoices... for gold trading transactions, ensuring the transparency of gold bullion transactions in the market.
Question: In order to encourage the development of the domestic gold jewelry market, gradually turning Vietnam into a center for manufacturing and exporting high-quality gold jewelry, what orientations and solutions does the SBV have, Sir?
Answer: The draft Decree regulates that the SBV shall grant licenses to qualified businesses and credit institutions to import gold material (businesses qualified for producing gold bullions) and they can then sell to gold jewelry and handicraft producers. In addition, the businesses and credit institutions licensed to import gold material must develop their internal regulations on the importation and sale of gold material, ensuring the transparency and publicity; developing and maintaining accurate transaction records, and providing all relevant data to the competent authorities,… in accordance with the provisions of law.
Question: In addition to terminating the State monopoly on gold bullion trademark and increasing the supply of gold material for gold jewelry and handicraft production, could you please tell us what solutions the SBV is expected to implement to contribute to the effective management and sustainable development of the gold market?
Answer: The draft Decree has amended and supplemented the responsibilities of the Ministries, agencies, local authorities in managing the gold market, as well as the requirement for the coordination between the SBV and the relevant Ministries and agencies in establishing an information system, building and storing databases on the gold market, and providing information to the relevant organizations to increase the transparency in the management activities.
In the coming time, the SBV will continue to operate the monetary policy in a proactive, flexible manner, ensuring the macroeconomic stability and the public confidence in the Vietnamese currency. In addition, the SBV will urgently study and learn from the international best practices to propose to the Government on the establishment of a National Gold Exchange, or to permit gold trading in the Commodity Exchanges.
HY