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Friday, June 21, 2024

Should the State continue its monopoly?

By Hoang Xuan Huy

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The widening gap between domestic and global gold prices does not stem from whether the State maintains a monopoly on gold bar production, but whether the gold supply is ensured. This supply depends on import quota policies that are in turn affected by exchange rate issues and foreign exchange reserves. In recent times, the gold bar market has run wild, with the difference between domestic and global gold prices reaching VND15 million to VND20 million per tael (domestic prices are 20-25% higher than world prices). In the face of this situation, many believe that the cause of the price difference is the impact of Decree 24/2012/ND-CP, which stipulates that the State has a monopoly on producing national branded gold bars to supply the market. Is this true? Some 12 years ago, before Decree 24 was issued, the Vietnamese gold bar market had multiple brands, but their prices still fluctuated sharply and had a high discrepancy compared to the world gold price. Moreover, prices varied from one brand to another, let alone the wide difference between buying and selling prices. The existence of many different gold brands created a monopoly on gold production and business for each brand-owning enterprise, so these […]
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