On May 29, 2024, Deputy Governor Pham Quang Dzung of the State Bank of Vietnam (SBV) gave an interview on the SBV's plan of interventions to stabilize the gold market in the coming time.
Question (Q): Could you please tell us about the SBV's goals and measures to intervene in the gold market in the coming time in order to implement the Prime Minister's directions on addressing the gap between the price of the domestic gold bullions and the international gold price?
Deputy Governor Pham Quang Dzung: In order to implement the Government’s and the Prime Minister’s directions, over the past time, the SBV has organized nine auctions, supplying 48,500 taels of the SJC-branded gold to the market, equivalent to over 1.8 tons of gold.
However, the gap between the price of the SJC-branded gold bullions and the international gold price remains high at over 20%. This shows that, in addition to the market factors such as the supply and demand relationship, there might be illicit activities like price manipulation and fixing, causing market instabilities.
To ensure the successful implementation of the goal of market stabilization under the directions of the Government and the Prime Minister, the SBV will sell gold directly to the four State-owned commercial banks, so that those banks will sell gold directly to the people. The goal is to narrow the gap between the domestic and the world gold prices at an appropriate and sustainable level.
In addition, we are also coordinating with the Ministry of Public Security, the Ministry of Finance, the Ministry of Industry and Trade, and the Government Inspectorate to organize inspections regarding the compliance with laws and policies on gold trading activities by the credit institutions and businesses; and will strictly handle with violations (if any).
Q: Please tell us the expected time and plan to sell gold directly to four State-owned commercial banks?
Deputy Governor Pham Quang Dzung: Right next Monday (June 3, 2024), the SBV will sell gold directly to the four State-owned commercial banks at the price determined by the SBV based on the world gold price. Those banks with their networks have prepared the necessary conditions for selling gold directly to the people.
Q: With the above intervention plan, what do you recommend to the people?
Deputy Governor Pham Quang Dzung: With abundant resources and existing tools, the SBV has the ability and determination to stabilize the market and achieve the above mentioned goals. The gap between the domestic and the world gold prices will be narrowed quickly and sustainably. Therefore, in light of fluctuations in the domestic and international gold prices, the people should be cautious when engaging in gold transactions in order to minimize risks.
Q: Thank you very much!