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Experts warned of harms from gold export   2009-03-16 - VietNamNet/VNE

The gold exports in the last while, when the world’s prices surged, brought large profits to Vietnamese enterprises. However, experts have warned that the continuing gold export will bring harm.


In the list of export items of Vietnam in the last two months, only four product items saw the export turnover increase, while the other 20 export items saw the turnover decrease.


All of Vietnam’s key export items, including oil, garments, and seafood products had the export turnover down drastically. Vietnam’s export turnover to key markets, including the EU, US, Japan, and ASEAN, reportedly dropped by 20%.


The two export items that saw the biggest increases in export turnover were rice (up by 113%) and precious metals, up by 3,152.6% over the same period of the last year, reaching US $939 million in turnover.


Statistics showed that the exports of precious metals, gemstone, and relating products were modest in February 2008, with the turnover of US $130 million. Meanwhile, the export turnover of the same products soared to US $800 million in February 2009.


The massive exports helped enterprises earn a big sum of money as they could re-export the gold they imported in the first half of 2008 at low prices.


Enterprises decided to export gold as the world’s prices were between VND 300,000-800,000/tael higher than the domestic prices.


Nevertheless, experts have warned that the massive gold export may do harm to the national economy. Later, when Vietnam has the demand for gold, it will have to import gold again. By that time, if Vietnam cannot well control the forex market, the demand for foreign currencies will soar, thus causing the imbalance in the monetary market.


Doctor of Economics Nguyen Dai Lai said that how to manage the capital sources most effectively also proves to be worth giving attention.


The gold export has really influenced the domestic gold prices.

In order to have gold for export, enterprises had to collect gold from institutions and individuals, and the massive collection has made the prices increase.


It may happen that the domestic prices would big higher than the world’s prices, which may cause a new wave of rushing to purchase gold, thus making the gold market tense.


The State Bank of Vietnam, realizing the risks of the gold export, has always been regulating the export with a cautious and hesitant manner.


The central bank granted licenses on gold export to several enterprises. However, the list of the enterprises and the volume of gold export has never been released.


The bank is considering the capability and legal capital of enterprises in order to grant quotas on gold export in the most reasonable way which ensures the fairness among enterprises. It is also checking the legal framework in order to set up the regulations on the management over gold transactions.


Experts all believe that the gold prices will keep rising in 2009. Several major countries in the world, including China, have decided to raise the foreign currency reserves, which are believed to lead to the very high demand for gold. In the context of the economic recession, other investment channels like real estate and the stock market have been falling. Therefore, gold has always been the safest habour for investors to preserve their capital and make profit.


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