HCMC – Prime Minister Pham Minh Chinh today issued a directive urging immediate action to stabilize the market which has long been dogged by the wide gap between domestic and world gold prices.
In the directive, PM Chinh urges greater oversight given the unpredictable movements of the world and domestic gold markets.
Despite multiple directives such as Official Letter 1426/CD-TTg issued on December 27, 2023, and Resolution 20/NQ-CP on February 5, 2024, the domestic gold market has remained volatile.
He told the State Bank of Vietnam (SBV) to coordinate with other agencies in taking rigorous measures to stabilize the market. This includes vigilant monitoring of global and domestic gold price movements to promptly take market stabilization measures.
The SBV has also been required to do a comprehensive review to tackle the persistent gap between domestic and world gold prices, preventing the “goldization” of the economy and its adverse effects on the economy, exchange rates, interest rates, and national financial security.
“Goldization” refers to the tendency of individuals to hoard gold and use gold as a means of payment, driven by concerns over the depreciation of the national currency. This term was first referred to in a Government decree issued in 2012, which sought to address and mitigate this behavior.
The PM expects a report on the outcomes of these efforts by the end of March.
In addition to regulatory adjustments, PM Chinh instructed the central bank to conduct thorough inspections of the gold market, and scrutinize the activities of gold trading businesses, distributors, and other market participants.
He said prompt identification and rectification of irregularities are crucial. Stringent enforcement actions must be taken against violations, especially those related to smuggling, speculation, manipulation, and exploitation of price-boosting practices.
Any detected violations in gold trading activities must be promptly reported to relevant authorities, ensuring accountability and public trust.
The SBV has also been urged to proactively engage in information dissemination, providing timely and transparent updates on financial market policies to bolster public confidence.
