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Sunday, June 16, 2024

PM calls for action on gold market management

The Saigon Times

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HCMC – Prime Minister Pham Minh Chinh has directed the State Bank of Vietnam (SBV) to review Decree 24 on gold trading and propose solutions for market management in the first quarter of this year.

Decree 24/2014 was introduced to combat the “goldization” of the economy, with SJC recognized as the national gold bar brand. “Goldization” refers to the tendency of individuals to hoard and make transactions in gold rather than using the national currency, driven by concerns over currency depreciation. This term was first referred to in a Government decree issued in 2012, which sought to address and mitigate this behavior.

On February 15, PM Chinh issued Directive 06 emphasizing the need to address gold market volatility, which is attributed to the SBV’s policy of not importing gold for production, resulting in gold being in short supply and domestic gold prices being higher than global levels.

To bridge the gap between domestic and global gold prices, which reached up to VND20 million per tael (a tael equals to 1.2 troy ounces) by the end of 2023, the central bank and relevant agencies have taken measures for intervention. These include increasing SJC gold supply so that the price would not lead to exchange rate fluctuations and inflationary pressure.

In addition to addressing challenges in the gold market, the directive calls for ensuring credit growth by 15% in 2024 to meet the economy’s capital demand. The SBV is tasked with simplifying procedures, facilitating capital access for businesses, and lowering loan interest rates to discourage informal lending and loan sharking.

Given forecasts of global and domestic economic difficulties, the Government has urged ministries and localities to reform administrative procedures and alleviate business challenges. Local governments are instructed to expedite land clearance for infrastructure projects like the Quang Trach-Pho Noi 500kV power line segment, ensuring completion and handover to investors in the first quarter.

PM Chinh has directed the Ministry of Planning and Investment (MPI) to monitor and expedite public investment capital disbursement in 2024, with reports on fund allocation extensions due before June 30.

The Ministry of Finance is tasked with stringent management of revenue sources and cost savings, and strengthening collaboration with the SBV and the MPI on measures to upgrade the stock market from frontier to emerging status, with a report due to the PM before June 30.

The Ministry of Industry and Trade is tasked with monitoring international freight transportation, proposing solutions to reduce shipping costs, prevent export disruptions, and ensure adequate supply of petroleum products to maintain market stability.

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