Leaders of five big banks in Vietnam have decided to sell off gold in hopes of boosting the supply and reducing speculation.
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| Banks sold gold at reduced prices as a measure to stabilise the market |
The cooperating in the campaign include Eximbank, ACB, Sacombank, Techcombank, and DongA Bank, in addition to Saigon Jewelry Holding Co. (SJC).
On October 6, the first day of the campaign, the institutions sold around five tonnes of gold, narrowing the gap between the domestic gold prices and the world rates to just over VND1 million (USD48) per tael.
Selling spree
SJC and five banks sold hundreds of thousands of gold taels on October 6 at prices that were VND400,000 (USD19.1) per tael lower than the market rate in a bid to cool down the market. Prices at gold shops that day were around VND44.9 million (USD2,154).
In response to this “strange” move, gold shop owners and others rushed to buy. SJC alone sold as nearly 20,000 taels of gold during the day. Phu Nhuan Jewellery Joint Stock Company (PNJ) sold off about 3,500 taels.
By the end of the day, the price for a tael of gold in Vietnam had decreased to VND44.05 million (USD2,113), despite an increase in prices in the world market.
Speculation slowed
These five banks have been allowed to set up accounts and trade gold in foreign countries to offset their low selling prices. They will continue to buy gold through their foreign accounts at the rates of the global market, and sell domestically until the market here is stabilised. After the Vietnamese market is more stable, they will continue to buy and sell as before.
According to the State Bank of Vietnam (SBV), the disparity between the gold prices in Vietnam and on the world market should should be VND400,000 (USD19.1). After the first phase of the campaign, this disparity is expected to be reduced to between VND500,000 and VND700,000 (USD24 - USD33.6).
The SBV has set up a working group to supervise operations of these institutions.
All together, the five banks sold over five tonnes, more than 130,000 taels, of gold on October 6, which makes up for just a small proportion of their supplies.
