Raising gold, foreign currencies for economic development

14:34 | 03/08/2017 Economy

(VEN) - The need to raise gold and foreign currencies worth of bank deposits as a source of capital for economic development continues to be mentioned by the government. This source of capital will yield great value, contributing to achieving this year’s GDP growth target.  

A resolution announced at the government’s regular meeting in May 2017 states that the State Bank of Vietnam (SBV) shall work on appropriate solutions to raise gold and foreign currencies from people as bank deposits in order to serve investment and socio-economic development, and report to the prime minister in July 2017.

According to experts, it is necessary to raise gold and foreign currencies from people, especially given that Vietnam is boosting production and promoting credit growth to ensure this year’s GDP growth target of 6.7 percent.

Credit growth reached 6.8 percent in the first five months of this year, while capital mobilization increased by an estimated 4.3 percent compared to the end of 2016. In particular, many commercial banks were being forced to hike deposit interest rates to ensure liquidity in the first quarter of this year. According to the National Financial Supervisory Commission (NFSC), the 87 percent loan to deposit ratio (LDR) of the entire credit system as of May 2017 was slightly down compared to the previous month. To complete this year’s GDP growth target, it is necessary to raise a huge amount of money.

The Vietnamese gold market has not seen strong fluctuations and gold speculation has significantly fallen in recent three years. In particular, there is no big difference between domestic and world gold prices. Therefore, the SBV needs to seek appropriate solutions to raise gold.

As for foreign currencies, thanks to the application of a daily-adjusted central rate, fluctuations have cooled down. In the first five months of this year, the VND/USD exchange rate only increased by 1.1-1.2 percent on average, while the foreign exchange market in Vietnam was much more stable than those in other countries. In particular, the country’s foreign exchange reserves are at an all-time high.

Financial expert Nguyen Tri Hieu said that careful steps should be taken to raise gold and foreign currencies. The government should make feasible plans, programs and projects, so that commercial banks can advise their clients.

With recent changes in the monetary market in Vietnam, raising foreign currencies will be easier than gold.

Duy Minh