Vietnam to Close Bullion Trading in Free Market

Source:

"The move signals further steps to control 2011 gold-trading."

Vietnam will wipe off bullion gold trading activities as part of its package to stabilize the macro-economy and ensure social welfares, according to the government's resolution released on February 24.

The Government has assigned the State Bank of Vietnam (SBV) to prepare documents for a decree on gold trading regulation with the target of one single gold importer, stepping up to dispose bullion gold trading in the free market and effectively stopping illegal gold trading across the borders.

The move signals further steps to control local gold-trading activities in 2011.

Can Van Luc, BIDV's Senior Advisor and Chairman welcomed the idea of establishing a gold exchange to make buying/selling transactions more transparent, market-oriented and easier to regulate, in which the central bank should be the regulator.

He said there should be a specific roadmap to develop the gold market, in which Vietnam should develop trading physical gold first and then allow trading gold on account, citing China as a good example.

During the last two years, Vietnam has squeezed local gold investing and trading activities by shutting down around 20 gold trading floors, preventing the banks from gold conversion into the dong for the lending purposes and restricting their gold deposit and lending activities.

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