Vietnam Central Bank Claims "Exclusive" Right to Make Gold Bars

THE CENTRAL BANK should be the sole producer of new Gold Bars in Vietnam, its deputy governor told reporters Wednesday.

The State Bank of Vietnam has also chosen Saigon Jewelry Co as the state brand for Gold Bars, SBV deputy governor Le Minh Hung told reporters. 

"The move was intended to save expenses for the government and society, as well as avoid messing up the gold market," said Hung.

"SJC is allowed to continue its Gold Trading activities," he added, "except for making new Gold Bars as this is something that should be exclusively implemented by the central bank."

The SBV announced last year that it had "administratively acquired" SJC, which now accounts for a reported 95% of Vietnam's Gold Bars market following an SBV decree that stipulated minimums sizes for refiners' levels of capital and tax returns.

Following that decree, all licenses for manufacture of Gold Bars expired, including that of SJC. Gold Bars previously produced by other refiners can still be traded, Hung said, although Vietnamese press reports that such bars are now fetching a lower market price than SJC Gold Bars.

An estimated 300 to 500 tonnes of Gold Bullion is held privately in Vietnam. Earlier this year, SBV governor Nguyen Van Binh said the central bank should "mobilize" this gold "in the service of socio-economic development". Former SBV governor Cao Sy Kiem last year suggested issuing gold certificates as a way of achieving this.

Vietnam is one of several countries whose policymakers have been taking an increasingly active interest in the gold market. 

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