How much gold do Vietnamese keep under their pillows? 17:00' 16/04/2008
VietNamNet Bridge 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
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
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 worlds 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 SJCs 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 worlds 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,
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.
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.
2. 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.