VIETNAM'S central bank announced on Tuesday it would allow imports of Gold Bullion, in order to "stabilize" the market – after strong demand saw domestic prices trading at a premium to international markets – though it warned consumers that Buying Gold at prevailing domestic prices was "risky".
The State Bank of Vietnam – which regulates the import and export of gold through licenses – said it will allow dealers to import five tonnes of Gold Bullion on Tuesday – with a possible further five tonnes to follow in the days ahead.
The domestic price of Gold Bullion breached 46 million Dong for a tael bar – which weighs around 1.206 troy ounces – before Tuesday's announcement.
At a black market exchange rate of 21,300 Dong to one US Dollar, this is equivalent to around $1790 per ounce. The spot market Gold Bullion price, by contrast, peaked at $1771 per ounce during Tuesday's Asian trade.
The SBV is in the process of drawing up new rules to restrict the trade in Gold Bullion. While draft regulation published in June continued to allow private gold ownership, it stated that only authorized firms could sell or Buy Gold. The use of gold as a medium of exchange would also be forbidden under the draft decree.
Vietnam's Ministry of Finance last week extended a tax on exports to include any jewelry whose Gold Bullion content is 80% or above. The 10% tax had previously applied only to jewelry that was 99% gold.
The SBV's currently sets its benchmark interest rate at 9%. Inflation, meantime, has risen for 11 straight months – hitting 22.16% in July, according to official figures.
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