Speaking before National Assembly deputies at their most recent meeting, SBV’s Governor Nguyen Van Binh said the scheme would be the main effort to mobilize gold from the public, safeguarding the country’s economic development, while also benefiting the gold owners.

In addition, the central bank will reorganize gold bar purchasing networks by granting licenses to businesses and credit institutions which are eligible under Government Decree No 24/2012/ND-CP. Accordingly, the right to buy and sell gold bars will only be permitted to organizations that have been licensed by the central bank.

The bank will also co-operate with the Ministry of Finance to recommend tax policies for gold trading activities to the Government.

Earlier, the SBV outlined its plans to manage the gold market in three steps by producing gold bars under the central bank itself, reducing gold-based lending and revamping purchasing relationships in the market.

The banking system has started its effort to mobilize capital for the economy by buying 60 tons of gold worth US$3 billion.

Despite gold prices surging by two per cent, Vietnamese people did not rush to buy gold in the first 10 months of this year, suggesting gold hoarding is already on the decline.

Experts estimate that 300-400 tons of gold worth about $15-20 billion were not put into investment, production or business last year.

In Vietnam, gold and foreign currencies have also been used as payment tools, leading to complications in currency policy management.

Gold prices increased by 9.1 times in the 2001-10 period, representing a 3.5-fold rise against the growing CPI. High gold prices also impacted on inflation expectations.