The State Bank of Vietnam’s (SBV) policy shift to selling gold to commercial banks that then resell the metal to the public to stabilize the gold market is not at all new. Eleven years ago, the SBV also mobilized banks to cope with the then gold rush. Is there anything different this time around and what will be possible effects? Immediate effects In a short while after June 3 this year, when the SBV announced it would sell gold directly to four state-run commercial banks – Agribank, Vietcombank, VietinBank and BIDV – for resale to the public, the price of gold with the SBV-monopolized SJC brand plunged by more than VND10 million per tael. Later, the SBV added Saigon Jewelry Company Limited (SJC) to the list of entities eligible to sell gold sourced from the SBV to the public to leverage its extensive distribution network across provinces and cities. As of the middle of this week (June 6), the price of SJC-brand gold bars had dropped to around VND77 million per tael (a tael equals 37.5 grams or 1.2 troy ounces), close to the selling price of VND75.98 million per tael which the SBV quoted for the four state-run banks […]
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