Viet Nam may export gold

Up to 95% of gold amount consumed in Viet Nam is imported yearly. Viet Nam has recently imported relatively huge amount of gold, more or less than 60 tonnes. In 2008 alone, over the past five months, the country has imported as much as 40 tonnes of gold.

With the world's current gold price of some US$900 an ounce or some US$1,084 per tael [duty, interest, charges are excluded], Vietnam has to spend nearly US$1.8 billion a year importing 60 tonnes of gold. Based on the current price, total value of gold imported over the last six-years amounted up to over US$10 billion.

Notably, over the last years, the government has not allowed to export gold, hence, the imported gold is still staying inside the country, particularly in residents, banks, gold traders and industrial production businesses.

The gold price in May was nearly 3.4 times as much as that in December 2001, far higher than the consumer price index (CPI) growth of 77% and the US dollar price growth of 7.1% in the same period. In recent months, the domestic gold price does not only depend the world's gold price but also the dong/US dollar exchange rate.

Importing huge amount of gold naturally requires large sum of foreign currency. Additionally, a significant amount of capital of the society lies in gold, impacting on bringing capital into direct production. In recent years, importing gold has also pushed trade deficit.

It is forecasted that the US's economy will be able to escape from the recession risks. It is likely that the US Federal Reserve (FED) will not continue cutting its key rate but US Federal Reserve will raise it again in a bid to prevent inflation risks. At that time, the US dollar will tend to recover and the gold price will reduce.

Thus, in addition to increasing the gold import duty that has been raised to 1%, it is necessary to promote gold export in order to reduce trade deficit. What is more important is that the gold export will help turn gold into capital for the economy.