By Khanh Vu
HANOI (Reuters) -Vietnam plans to open an online gold exchange and will allow companies to import gold for the first time in over a decade starting from next month, part of efforts to stabilise domestic prices, which are rising at a breakneck pace.
The move, according to local economists, is aimed at balancing gold supply and demand and could also help mobilise private resources to spur economic growth.
The State Bank of Vietnam, the country’s central bank, is studying international experience to establish the exchange, state media cited a central bank official as saying on Thursday.
The central bank will also alternatively consider trading gold on the Mercantile Exchange of Vietnam or in a planned international financial centre, deputy SBV governor Pham Quang Dung said, according to a report by the Dan Tri newspaper.
The Southeast Asian country, one of the region’s fastest-growing economies, is seeking to maintain macroeconomic stability, with prominent academics warning that rapid credit expansion could fuel asset price bubbles.
The central bank is also trying to stabilise the domestic price of gold, a popular investment choice and considered a wealth preservation tool in Vietnam.
Despite efforts last year to boost supplies via auctions and commercial banks, domestic prices have risen by 60% so far this year, and as of Thursday remained around 23% higher than the international market.
A government decree seen by Reuters will allow qualified companies to import gold starting from October 10. The central bank will issue gold import licences to the companies and set an annual quota.
Hanoi-based economist Vo Tri Thanh said more imports could help cool domestic gold prices and narrow the gap with the global market, but it could also put pressure on the exchange rate.
“You will have to spend U.S. dollars to import gold, and the more gold you import, the larger outflows of the greenback,” Thanh said.
The decree, issued August 26, will also end the central bank’s monopoly in gold bullion production in a bid to diversify gold supplies and increase competitiveness and transparency in the market, the central bank said earlier this week.
The central bank said it will also tighten controls over gold trading firms to prevent money laundering, speculation, smuggling and illegal trading.
Police in Vietnam this week prosecuted a former chief executive officer of Saigon Jewellery, one of the central bank’s production contractors for gold bullion, on charges of embezzlement and abuse of power.
($1 = 26,397 dong)
(Reporting by Khanh Vu; Editing by David Stanway)
