Vietnam: World’s 2nd Largest Gold Hoarder
Source: Vietnam Business News (6/16/11)
"The government recognizes citizens' right to store gold, but not to use it as payment."
Vietnam is hoarding between 460 and 1,000 tons of gold worth around US$21B–$4B, second only to India, according to figures released last week.
The figures take into account gold held by the people and stored at banks.
The data were released during the conference in Hanoi themed "The effect of the gold market on financial market in Vietnam" held by the National Financial Supervisory Commission, as reported by Sai Gon Tiep Thi.
The World Gold Council ranks Vietnam as among 5 countries with the largest gold hoarding in the world, second after India. Vietnam's gold takes up 23%–29.5% of the world's total gold during the past 5 years.
Vietnam is among the top 20 countries that buy the most gold jewelries (20 tons per year). Such a high consumption rate has been maintained for the past many years, reported the GFMS gold company during the conference.
Such a high gold hoarding is blamed for exacerbating the dollarization situation in Vietnam, opined some experts.
At the conference, experts suggested abolishing quotas on gold imports and exports, which is attributed to widening the discrepancy between domestic and international gold prices.
Some suggested setting up a "national gold trading floor, to be supervised by the State Bank of Vietnam. This they said would make the gold market in Vietnam more transparent and help reduce price discrepancies.
The State Bank of Vietnam, the country's central bank, has proposed the government ban the trading in gold bullion.
The central bank in April also asked commercial banks to cease lending gold in May and stop accepting gold deposits two years from now.
The new rule is an attempt to eliminate the role of gold as a means of payment in Vietnam, but the government will continue to recognize citizens' right to store gold.