State bank to submit gold plan

According to SBV’s assessment, citizens possess a large amount of gold, from 300 to 500 tons.

“If we fail to mobilize this source of gold to serve socio-economic development, the country would be unable to grow strongly,” Binh said.

“The gold market management must guarantee the benefits of gold depositors as well as ensure the mobilized capital source to be used for socio-economic development, especially in the current hard time.”

Under the plan, the State will mobilize gold from citizens through credit institutions. This way, it will not directly intervene in the market.

Meanwhile, through various tools like gold account trading on the world market, Vietnam will insure risks of global gold price volatility, thus guarantee the assets of citizens. The State can also exchange mobilized gold for foreign currencies to serve socio-economic development.

Binh also had high hope on the possibility of bringing down the interest rate. The governor said there had been conditions to pull down interest rates. In particular, since August 2011, the nation’s consumer price index (CPI) growth has always been under 1 per cent a month, raising hope about a lower inflation rate in the coming time.

In addition, SBV is now focusing on solving banks’ liquidation issue. If the situation is well remedied, a lower deposit rate within this year will be more likely.

According to Binh, the Government aims to restrict inflation at a single-digit rate in 2012, specifically at 9-9.5 per cent.

Several international organizations said if Vietnam continued to take drastic measures like those in 2011, the country’s inflation would be 8-8.5 per cent this year. If such a target is achieved by the year’s end, the banking system will possibly revise down deposit rates to 10 per cent a year, he said.

As for the forex rates, Binh said if there was no major upheaval from external factors, the forex market could be kept stable and the Vietnam dong would be devalued by only 2-3 per cent in 2012.

However, Binh admitted 2012 would be another tough year for the banking system given the general economic woes and the shortcomings of the system itself.