Sign up | Log in



Home  >>   Daily News  >>   Vietnam News  >> Economy  >> Public confidence worth its weight in gold
NEW UPDATES Asean Affairs   16  January 2014  

Public confidence worth its weight in gold

HA NOI — The Government has instructed the State Bank of Viet Nam to issue "proper" policies in order to mobilise gold hoarded by the public and use it for socio-economic development.

Experts have suggested several ways to do this, including the issuance of gold deposit certificates that can be used in derivatives market transactions, which would mean the reestablishment of gold exchange floors, this time with much firmer legal and technical frameworks that would prevent market destabilising movements.

They caution, however, that a fresh attempt to mobilise gold would only be effective if public concerns are seriously addressed.

In the past, the focus has been on "larger national interests" that failed to consider the factors behind the Vietnamese public's long-standing tradition of hoarding gold, which they see as the safest investment and insurance in times of economic and financial uncertainty.

The Government's latest instructions have come after three years of applying several administrative measures to encourage people to release their gold hoardings and settle the "disorder" that the domestic market for the yellow metal had experienced over the past several years.

The disorder, which included significant price differences between domestic and world gold prices and the impacts of speculative activities, has been blamed by many experts on weak legal and technical frameworks that governed the market.

The situation was exacerbated by developments in the forex market that undermined public confidence in the domestic currency.

In response, the State Bank of Viet Nam had taken several steps including suspension of 20 gold trading floors, the closure of all gold deposit accounts at commercial banks, stricter conditions for trading in gold bars, establishment of a single national brand and conducting gold auctions.

Last year ended with the closure of gold deposits as well as the end of a 12-year bull run on gold, domestic prices of which plunged 24 per cent year-on-year towards the year-end.

Vu Viet Ngoan, Chairman of the National Financial Supervisory Committee, said that given the perspective that the decline in local gold prices was in keeping with the world trend, the central bank's moves have stabilised the domestic market.

World gold prices plunged 28 per cent in 2013 after the US Federal Reserve announced plans to reverse its ultra-loose monetary policy starting January 2014, diminishing gold's appeal as a hedge against inflation.

With Viet Nam having completed blocking most ways of doing business with gold legally, and the propensity for intensive speculation and major market fluctuations reduced significantly, policymakers do have a new opportunity to have gold hoardings by the public released for national development, experts agree.

The administrative measures applied in the gold market thus far is likened to a tactic employed by Vietnamese children to catch cave crickets. They block all except one exit with solid objects and pump water into a nest. The crickets have no choice but to escape through the only exit that is open, allowing the children to capture them easily.

However, "capturing" hoarded gold might not be that easy.

They suggest that the central bank issues gold deposit certificates for fixed-term deposits that cannot be withdrawn before the maturity date. Gold deposits mobilised thus can be used as collateral at foreign credit institutions to borrow foreign currencies at cheaper costs. The capital thus raised can be used to further socio-economic development, they say.

They also say that to facilitate this process, policymakers need to prepare "competent legal and financial grounds," as also a derivatives market where the gold deposit certificates can be traded easily.

However, they hasten to add that no measure can be effective unless public concerns are allayed and the gold deposit certificates have the liquidity that allows owners to use them for purposes that gold had been traditionally used for, like buying major assets including land and other properties

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below

Today's  Stories   16 January 2014 Subsribe Now !
• Caretaker PM Yingluck stands firm on Feb 2 poll Subcribe: Asean Affairs Global Magazine
• Overseas employment growth to boost 2014 remittances Asean Affairs Premium
• Economic freedom low: report
Research Reports
on Thailand 2007-2008

• Textiles and Garments Industry
• Coffee industry
• Leather and footwear industry
• Shrimp industry

• Vinamilk deal to go ahead• Vinamilk deal to go ahead
• Public confidence worth its weight in gold
Asean Analysis                    14 January 2014 Advertise Your Brand
• Asean Analysis-January 14, 2014
Cambodia Crackdown: Deadlock Far from Over
Asean Stock Watch     15 January 2014
The Biweekly Update
• The Biweekly Update  January 10, 2014

• Asean Stock Watch-January 15, 2014

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2017 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand