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Reports Vietnam will allow gold imports before the end of the year

The Vice Chair of the Vietnam Gold Traders Association, Huynh Trung Khanh, has told Reuters that gold imports into Vietnam could be permitted from July or August. This is after 12 years of state control of gold imports which has seen new gold legally brought into the country slow down to a trickle.

If this is accurate, this would signal an interesting turn of events. To be clear, the State Bank took control over gold imports and exports to stabilise the local currency when inflation surged back in 2011. At the time, gold was being used as a store of wealth to hedge against inflation and banks were permitted to lend and borrow against the yellow metal which was pushing up demand (incidentally this practice was banned in 2012, too). This was increasing demand for US dollars to import more gold and subsequently putting inflationary pressure on the local currency.

The point to all this is that there is quite a lot of pressure on the local currency now. The State Bank has been issuing treasury bills and burning through its US dollar reserves left, right, and centre trying to keep it from devaluing further. In this context, allowing the import of more gold right now seems counterintuitive.

See also: The Gold Price in Vietnam: Explained 2024

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