Five billion dollars, eight tons of gold and corollaries
A large volume of gold and dollars has been kept among people. The volume has been out of circulation and it has not been counted and included when setting up fiscal policies. However, the volume is large enough to cause risks to the national economy.
A large volume of gold and dollars has been kept among people. The volume has been out of circulation and it has not been counted and included when setting up fiscal policies. However, the volume is large enough to cause risks to the national economy.
Keeping gold is safe, but unprofitable
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This means that the money is not put into circulation or poured into investments, and it must be lying somewhere among the people. Vietnamese people keep dollar and gold as a kind of asset, because they believe that this is the best way to preserve their assets in the context of the dong depreciation.
There are no official statistics about the volume of gold kept among the public, but experts have estimated that it could be 700-800 tons.
Vietnam now has a bustling dollar black market , though management agencies say it is a small market which does not have impacts on the dollar price. In fact, people always keep a close watch over the black market to predict prices, performance and the supply situation.
Vietnam has imported big amounts of gold in the last few years. It imported 50-60 tons, or even 80 tons some years. The imports consumed billions dollar every year, thus putting pressure on the dong/dollar exchange rate and the monetary policy.
Experts from the World Bank said that the habit of Vietnamese people to keep gold as their assets is one of the main factors that influence gold prices. People hoard up gold and dollars because they believe that these are the two safe shelters for their assets. However, this has been causing damages to the national economy.
The unknown inside people’s coffers
Analysts have pointed out that tens billion dollar have been put into the coffers at people’s houses, and this means that a huge sum of capital has not been put into investment, which is a substantial waste.
The experts from the Central Institute for Economic Management, once noted that Vietnam’s trade deficit is about five billion dollars. And if the sum of money kept among people is “liberalized” and put into circulation, this will help create the balance, and the dollar shortage will be settled. In principle, Vietnam does not lack dollars.
A paradox exists that when Vietnam has to move heaven and earth to borrow foreign loans for investment and development, billions of dollars in gold and greenback have still have not been mobilized. Besides, the spending of billions on gold imports also puts pressure on the trade balance and exchange rate.
Analysts have also warned that a sudden addition to market from converting gold into money or investing in other assets may cause uncertainties in the market. Therefore, the World Bank has advised to keep control over the cash inflows and outflows.
When a big volume of capital is put into operation that is out of the control of the management agency, it will cause inflation and uncertainties to the national economy. This is also makes it difficult to implement monetary policies and in turn makes the policies less effective even when strong administrative measures are applied.
Le Khac