The STATE BANK of Vietnam is struggling to curb what it calls "speculation" in the gold market, despite tightly licensing all retail and bank outlets and now seeking to become the sole point of all gold imports and exports from the one-party Communist country.
"The State Bank will participate directly in the gold market to create and ensure tight prices," says director of foreign exchange management Nguyen Quang Huy, writing for legal-news website Phap Luat this weekend.
"First, the central bank will offer gold for sale at public tender auction. In addition, the Bank will develop export and import processes, directly regulating the way gold is sold to control speculation and keep it to a minimum.
"In the long run, the central bank will host two gold bullion trading centers in Hanoi and Ho Chi Minh City, for public tender. After a stable market for about two years, it will allow inter-bank trading and gold dealing businesses."
Vietnam's latest gold market announcement comes after weeks of confusion and sharp losses for banks and consumers involved in gold bullion loans – loans which must now be settled by June 30 according to a new State Bank decree, even though many run for 5 years.
Meanwhile, Government Decree 24 – which took effect on 14 January, and which made gold dealing illegal for any bank or business without the necessary license – has been widely ignored and bypassed, according to other local reports.
The Saigon Times Daily quotes strong sales of non-bullion products by the Saigon Jewellery Holding Company, and "the new restrictions, combined with the wide gap between domestic and
global gold prices, has forced gold buyers and sellers to turn to gold
rings as a safe haven," says Tuoi Tre news.
A reporter from the newspaper says he found many newly illegal gold-bar trading shops dealing "covertly" with the public, simply turning off their live digital price displays and putting only jewelry items on show.
"It will not be an easy task for the central bank to organise the imports and trading," said an un-named executive to Reuters last week, "as it does not have an available trading network as the banks and companies do."
Two weeks after the new regulations came into force, commercial banks holding full gold-trading licenses haven't yet opened operations across their branch networks, according to several Viet news reports, with staff lacking the training and knowledge needed.
Despite 2,500 newly licensed trading centers being launched, tens of thousands of now illegal shops remain.
"In the longer term, if the violations loom large, we will apply heavy penalties," the paper quotes Nguyen Hoang Minh, deputy director in Ho Chi Minh City for the State Bank.