– It is estimated that some 600 tonnes of gold have been imported into Vietnam. Only a small part of the volume has been deposited at banks or crossed the borders again. How much gold are Vietnamese people keeping under their pillows, then?
In the first months of the year, Vietnam imported some 50 tonnes of gold. If every tonne of gold is $30mil, then $1.5bil has been spent to import gold. The gold imports were the same in previous years.
Also in the first months of 2008, nearly 40 tonnes of gold were processed into 1mil taels of gold marketed by the Saigon Jewellery Company.
Gold imports worth $18bil?
The first months of the year were considered the high gold import season as the domestic prices were always lower than the world’s prices. Some 40 tonnes of gold were imported in the first quarter of 2008, while nearly 10 tonnes more were imported in the first days of April.
It is impossible to reckon the real imports of gold, as gold has been imported in both official and unofficial channels. Experts have to consider the volume of gold SJC launches onto the market to estimate the imported gold volume.
Since SJC was born in 1988, 11mil taels of SJC gold have been marketed. 1mil taels of SJC gold are equivalent to 37.5 tonnes of gold, which means that SJC has marketed 410 tonnes of gold so far, which have the value of $12.3bil if considering the gold price at this moment.
Moreover, a big volume of gold has been imported to process jewellery. There are two different viewpoints about the imports. Some say that the imports are 20 tonnes, while others say that only 100 tonnes have been imported to make jewellery.
If 200 tonnes is the right figure, the total gold imported to Vietnam so far, including SJC’s 400 tonnes of bar gold, would be 600 tonnes, worth VND18bil (VND288,000bil).
Where is the gold now?
This remains a mystery. A member of the Vietnam Gold Business Association said that only 1-1.5mil taels have been deposited at banks, while the remaining volume is being kept by people. Though banks have been trying to attract more gold, people still do not want to make deposits in gold. Vietnamese people have the habit of keeping gold to save up their money rather than doing business.
Some experts say that a small part of imported gold was melted down and sent back abroad through border gates when the domestic prices were lower than the world’s prices. However, there is no official figure about how much gold has crossed the border. If 100 tonnes of gold have crossed the border, then the gold volume remaining in Vietnam is still 500 tonnes, worth $15bil.
Gold remains the choice of Vietnamese people
Le Thi Ngoc, the owner of a restaurant in district 2 in HCM City, said that she has sold $20,000 to buy gold and make a gold deposit at 2.6% per annum.
Ngoc said that she has the habit of keeping dollars and gold. However, as the dollar has been devaluating, she has decided to sell dollars and keep gold.
Truong Thi Quynh Giang, a retired woman in Binh Thanh district in HCM City, also said that previously, she converted all the dollars her daughter remitted from the US to VND to make VND bank deposits. However, she has decided to deposit in gold instead of VND due to the high inflation.
An official of Eximbank said that depositing in gold surely cannot bring as high a profit as VND deposits can. However, many Vietnamese people still make gold deposits because they think keeping gold is the safest way to save money.
Two periods of gold import
Gold imports from 1975 till now can be divided into two phases.
Before the 1990s: It was not until the early 1990s, when Vietnam had profuse foreign currencies and the domestic market witnessed gold price fever, that the government allowed the resumption of gold imports. However, the imports stopped in 1997 because imports consumed too much foreign currency. The imported gold volume was not big during that time. After the decision on stopping gold imports was released, gold was only illegally imported through the southwest border gates. The illegal importers paid for the import deals with the dollars they got on the black market. At that time, the black market always saw dollar fever (dollar price increased sharply) as gold importers collected dollars to import gold.
2001-now: The government allowed the resumption of gold imports. 10 tonnes of gold were imported in the first year, while the figures increased gradually the next years: 64 tonnes in 2006, 60 tonnes in 2007. However, the figures about gold imports released by different sources vary.
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