Thursday, March 17, 2011

Alternative To Gold Ban Floated In Vietnam

Recently, there's been a crackdown on gold and U.S. dollar trading in Vietnam. Perhaps out of concern that the original measure is too punitive, economist Vu Dinh Anh believes that a central exchange should be set up instead so as to control sales of and lending in gold rather than banning the gold trade outright.
The expert cited the statistics as saying “that 45 percent of money saved by Vietnamese people, especially the local residents in rural areas, is in gold. Only 24 percent of monies have been deposited in banks, while the remaining proportion has been injected in foreign currencies and real estate.”

Experts all agree that it is necessary to tighten the control over the bar gold market, but it is not advisable to prohibit bar gold trading.

Nguyen Thanh Truc, Chair and General Director of Agribank’s Jewellery Company also thinks that it is very difficult to prohibit the trading of the special kind of commodity, saying that “if the government tries to eliminate the market, another market, a black market, will take shape.”...
Total hoards of gold owned by Vietnamese has been estimated by the World Gold Council at 500 tonnes, with a value of 22 billion U.S. dollars. Another estimate says the figure could be as high as 1000 tonnes.

That's a lot of gold, whcih speaks to a large market for the stuff. From my outside perspective, going easy on such a big market would be prudent.

No comments:

Post a Comment