Tóm tắt Luận án State management of the gold market in Vietnam

policy of gold market and capital control activities in China 1.3.2. State management policy for gold market in India 1.3.2.1. Infrastructure regulates the gold market in India Due to its special role to the economy, the Indian gold market is very well segmented by regulatory agencies with different functions and tasks. The Reserve Bank of India (RBI), as a monetary regulator, regulates and oversees the financial system, plays a dominant role in the gold market. 1.3.2.2. Gold import and export activities in India 1.3.2.3. Tax structure for gold in India 1.3.3. Lessons learned for Vietnam From the case studies of state management practices for the gold market of China and India, both have confirmed the importance and spread the role of state management to the gold market. Every gold market contains certain risks related to the specific market of each country, so the issue of state management for the gold market is always placed urgently, regardless of size or market level. Where is the school? Especially, the gold markets are still in its infancy and in the context of macroeconomic fluctuations, it is necessary to follow and strengthen the role of state management. 1.4. Study Overview 1.4.1. Foreign studies on the gold market - Qualitative research on gold market structure: Gary O’Callaghan (1993) introduced and analyzed in detail the structural diversity of the gold market, Y.V. Reddy (1997). The research paper on the change of gold management policy of the Central Bank of India Sun Zhaoxue (2011) has pointed out the relationship between the gold market and the health of the economy, while also giving an overview of gold industry in China. Which 7 highlights the role, mission of developing the gold market, the way to organize in accordance with the goals. - Research on the operation mechanism of the gold market: Alberto (1983) provided a complete description of the gold function in the Jamaica system. Baur and McDermott (2010) examined the role of gold in the financial system and considered gold more stable in terms of returns than stocks, bonds, and other financial instruments. - Macro factors affecting gold price Interest rate: Harmston (1998) studied data on US Treasury bills and long-term government bonds from 1896 to 1996 and showed a negative correlation between gold price trends and the value of Other long-term bonds. USD exchange rate and index: Sjaastad (2008) investigated the theoretical and empirical relationship between important exchange rates such as USD, Pound, Japanese Yen and gold using the wrong forecast data. and argue that fluctuations in exchange rates between currencies are the main causes of instability in gold prices. Inflation: Sherman (1983) holds that gold prices are positively correlated with the level of inflation, regardless of the existence of expected inflation. Ranson and Wainwright (2005) think that gold price is an indicator of inflation and the bond market, and it can act as a predictor of inflation, short and long term nominal interest rates. Geopolitical events: Barkoulas (2008) pointed out that in an extraordinary geopolitical event, in the short term, the price of gold increases while the price of gold mining companies declines. Other factors: Malliaris et al. (2009) used an ANN-a neural network to collect data on gold, oil and the euro from January 4, 2000 to December 31, 2007. Results of time series analysis indicate that there is a short-term and long-term relationship: oil changes in prices of gold, euro and oil have a strong impact on gold prices; The relationship between gold and the euro is the weakest. - Studying the international monetary properties of gold: Cohen (1971) defined gold as an international currency from the perspective of monetary functions; The function of international currency is to expand the domestic monetary function abroad. Tavlas (1997) states that when gold is a currency that acts as a measure of value, a means of exchanging and storing value in international transactions without the participation of currency issuers, that creates monetary internationalization. - Research on the impact of monetary policy on gold price: William D. Lastrapes, George Selgin (1995a) pointed out a positive gold price shock that caused the gold price to increase by 2% due to the effect of a gradual increase in the fund rate. The federal nearly 10 basis points after about 12 months, and gradually reduced foreign exchange reserves. These findings imply that the average Fed actually changes its foreign exchange reserves in 8 response to a change in gold prices, though mostly after this change is maintained for several months. 1.4.2. National research Nguyen Van Anh (2009) With the study "Solution to improve the efficiency of gold business management according to the functions of the Central Bank", the author pointed out that "gold in foreign exchange reserves is gold plays a monetary role. At the same time, the central banks of all countries have gold management policies through the management of gold belonging to the national foreign exchange reserves and management of the domestic gold market”. Nguyen Duc Trung (2012) With the study "Solution to manage gold market in Vietnam" for the first time, using econometrics applied to analyzing objectives and tools of SBV regulating gold market in Vietnam in period from 2006 to 2013. The model used is VAR model including 5 variables: domestic gold price, international gold price, inflation, exchange rate, foreign exchange reserves. Research shows that inflation, exchange rates, foreign exchange reserves all have an impact on domestic gold prices. The author pointed out that the gold management policy of the SBV basically affects the market structure, positively affects the foreign exchange market, and monetary policy. Bui Kim Yen and Nguyen Khanh Hoang (2013) with the research topic "Management of gold prices from a macroeconomic perspective". Research using econometrics as a VAR model for domestic gold prices, world gold prices, deposit rates, exchange rates and inflation to make comments on the SBV's gold market state management policy. The study shows the relationship between the deposit interest rate, exchange rate and inflation variables with domestic gold prices in the 10-year period from August 2003 to July 2013. Thereby assessing the positive effects of the State Bank's gold market management policy. Nguyen Thi Thanh Huyen (2015) with her PhD thesis "State management of gold trading activities in Vietnam". This is a systematic study on state management of gold trading, in which the author uses the method of sociological investigation with questionnaires. The paper has systematized the contents of internal management of the state, and at the same time gave the system of criteria to evaluate the perfection of the state management policy of gold trading. Tô Anh Dương (2009) with the study "Gold market management: International experience and policy recommendations for Vietnam". Through practical surveys of two markets, China and India, the author gave the experience of state management to the gold market in Vietnam as: (i) Managing on the basis of respect for market principles, supply laws The SBV's management objective is to make the optimal use of this resource. Use gold resources for stable economic development. (ii) Promote the concept of market liberalization, the roadmap should be consistent with the general trend. Do Thi Thuy (2010) with the research paper "Vietnam Gold Market 2010 - Impacts on financial policies and operations of commercial banks", Through assessing the impact of macro variables such as exchange 9 rates, inflation to gold price and surveying activities of commercial banks, the study offers policy implications. Tran Ngoc Tho (2014) with the research paper "Managing the gold market: The Mission of the State Bank", the research shows that gold is money (ultimate money). Therefore, gold market management is a tool of monetary policy to manage money supply. At the same time, by settling the gold position, bringing the gold to the balance sheet of commercial banks, it has contributed to stabilizing the macro economy. 1.2. Research gap From the above summary, the thesis finds that there is still a gap that needs to be supplemented and completed as follows: The domestic and foreign studies have studied only a part of the aspect of the price of gold, gold trading activities, State management with gold trading activities. However, the systematic study of state management of the gold market on the level of gold as a financial asset is a research gap. In which, the management of the gold market is closely linked with the implementation of monetary policy. Empirical research in different countries will yield different results. The thesis will approach towards systematizing monetary policy impacts on gold market state management policies, building a VAR model including many macroeconomic variables based on economic theories and drama. from external shocks and from state management policies to the gold market by month. Quantifying this relationship in the model will be a highly practical applied research direction. The thesis will analyze the impact of external shocks and state management policies on the domestic gold market through macroeconomic variables such as interest rates, exchange rates, inflation and national foreign exchange reserves. Data analyzed by month, from the results of empirical research, the thesis will propose a number of related solutions to complete the state management policy for the gold market in Vietnam. CHAPTER 2 - CURRNENT SITUATION OF STATE MANAGEMENT OF GOLD MARKET IN VIETNAM 2.1. Practical gold market in Vietnam 2.1.1. Overview In Vietnam during a long period of war and political instability, gold was used as a traditional saving mechanism and even used as a means of payment and price standard for trading valuable assets. The state management of the gold market has always had an organic relationship with the operation of monetary policy in Vietnam due to its binding on both laws and mechanisms. 2.1.2. The period from before 2006 - The gold market started to be under control In 1999, the Government issued Decree No. 174/1999/ND-CP to expand business activities in the gold market. In 2004, in order to contribute to macroeconomic stability and to support exports, the SBV adjusted lower the VND / USD exchange rate, narrowing the 10 difference between the exchange rates listed at commercial banks and exchange rates on the free market. Credit growth is estimated at 29% a year on average. Immediately, the domestic gold market was supported to create momentum for expansion of both scale and structure. 2.1.3. From 2006 to 2009 - Booming gold market During this period, the domestic gold market continued to fluctuate, always growing hot with an explosion of gold trading units with production functions. Beginning in 2007, Vietnamese commercial banks launched a new type of business, the Gold Exchange. In this period, in order to control inflation, the SBV implemented monetary policy tightened. Vietnamese commercial banks immediately turned to gold trading on their accounts after the SBV tightened lending criteria for traditional commercial lending activities of commercial banks. The price of gold has been constantly increasing, coupled with the long-standing preference of hoarding gold that people have been buying gold. Increasing domestic demand for gold has created a high margin between domestic and world gold prices, putting pressure on USD demand to serve gold imports. This situation lasted for a long time, causing psychological confusion for people. 2.1.4. Period from 2010 - now: The SBV controls the gold market with administrative tools, associating the State management with the goal of stabilizing the macro economy. The gold market witnessed a boom of the market in 2009, but behind the picture there are potential uncertainties as the state management has not kept pace with the development of the market. On December 30, 2009, the Government issued an instruction order 369/TB-VPCP for the closing of all gold trading floors with a deadline of March 30, 2010. In April 2011, the State Bank issued Circular 11/2011/ TT-NHNN with the main content being that the SBV prohibited commercial banks from lending gold or accepting deposits in gold (called "gold mobilization") to any individual, organization. Decree 24/2012/ND-CP specifically banned gold bars as a means of payment / intermediary exchange, the State switched to exclusive production of gold bars, this is the only unit allowed to import and export raw gold. In the case of gold, gold bar trading may only be carried out by licensed entities. The SBV holds gold as part of the official list of foreign reserves. 2.2. Analyze the status of gold market 2.2.1. The situation of fluctuations between domestic and international gold prices Since 2012, there has been a clear contraction of the fluctuation range of domestic and international gold prices. By resolute measures and efforts through the SBV's impact process, the domestic gold price was more stable before the fluctuations of international gold prices, thereby stabilizing the market. 11 2.2.2. The continuity of the gold market and the foreign exchange market When the SBV issued Decree 24/2012/ND-CP the correlation between gold price index and USD has changed, the correlation is not as clear as the previous period. Therefore, it is partly possible to see the effect of the SBV's policy on controlling the gold market. 2.2.3. Difference between domestic and international gold prices The temporary suspension of interconnecting the domestic gold market with international instruments is a mandatory and prudent step to ensure the monetary security and internal health of the economy against changes. The continuous and regular nature of the international gold price. There exists a margin of difference between domestic and international gold prices as a result and due to a number of specific reasons as follows: 2.2.3.1. Imbalance between supply and demand for domestic gold 2.2.3.2. High volatility of international gold prices 2.3. Evaluation of State management measures for the gold market by the SBV 2.3.1. State management goal for the gold market of the SBV Firstly, enhance prevent goldization comprehensively. Second, control the supply of gold bars to the market consistently. Thirdly, stabilizing the domestic gold market is closely linked to macroeconomic stability.. 2.3.2. Positive aspects of the policy 2.3.2.1. The policy of ending mobilization and lending of gold in credit institutions The SBV showed initial orientations for credit institutions in mobilizing and borrowing capital in gold in a tightened direction. This move by the SBV has created a timely reduction of the system's liquidity at the end of 2012, maintaining the necessary stability for gold prices. At the same time combining gold bidding methods for commercial banks to settle the gold status, the SBV achieved two parallel goals at the same time: to ensure a stable gold price and gold market; gold is completely excluded from the two debt assets and creditors of commercial banks. 2.3.2.2. Policy on management of gold trading and production activities With the highest determination in state management of gold trading activities in a tighter and more disciplined manner, the Government issued Decree 24. The Decree also made a great impact on market sentiment, falling gold prices but people People did not buy gold but continued to wait for more information of the market, especially speculation sentiment nearly disappeared. 2.3.2.3. Measures against goldization Firstly, improve the effectiveness of monetary policy management by the SBV. Second, help stabilize the forex market. 2.3.2.4. Measures to stabilize the gold market - The SBV has created a funnel mechanism in concentrating resources to reinvest in the 12 economy. Unifying a gold brand to help identify easily and ensure the rights of people. At the same time, the SBV easily controlled the quality of gold bars in circulation. - The role of market stabilization is strictly and thoroughly implemented by the Government and SBV. 2.3.3. Limitations need to be overcome 2.3.3.1. Restrictions in identifying goals, planning strategies for gold market development Firstly, the state management agencies do not have a long-term vision for the gold market, leading to policy formulation that is always slower than the market development process. Secondly, the SBV's regulations are all dealing with specific situations without specific provisions defining the Gold Market Development Strategy or the Gold Market Development Scheme. 2.3.3.2. Restrictions in the legal framework governing the gold market Firstly, the SBV has not issued any regulations related to overall planning, detailed design and construction of the gold market. Secondly, a number of state management policies on the gold market are lacking in comprehensiveness. Third, the legal regulations on gold market activities are not consistent with other laws. Fourth, the stability of state management policy of the gold market is not high. 2.3.3.3. Restrictions in organizational structure of state management of gold market Firstly, the apparatus of State management of the gold market in Vietnam is a product that can handle the subjective situation of managers, but not really derived from the development function of the gold market. Secondly, not in line with international practices, all have formed a specialized agency, independently managing the gold market, thus partly reducing the independence and flexibility in managing the gold market. Thirdly, the organization of the state management apparatus for the gold market is still in favor of the state administrative organization organized by the SBV. 2.3.3.4. Restrictions on policies and tools for State management of the gold market Firstly, the system of policies and tools is still inconsistent, many aspects are limited. Secondly, instrumental policies cause financial repression, affecting the stability of policies and causing distinctions of business entities in the market. 2.3.3.5. Policy on managing gold bar business activities Firstly, the openness and transparency of regulations on the gold bullion bidding process, the announcement of the bidding results, and the announcement that the volume of gold bullion purchases and sales of the SBV is not high. Second, policies to mobilize gold reserves among the people have not been effective. 2.3.3.6. Tax policies governing gold trading activities Firstly, in fact, the feasibility and effectiveness of VAT calculation by the method of direct VAT calculation with the same tax rate is applicable to a mixed business 13 establishment which has just conducted business activities. Gold trading has not had high gold production yet. Second, SCT for gold trading has not yet shown its role as a guiding tool. 2.3.3.7. Gold smuggling problem In fact, the problem of gold smuggling is always a historical issue in Vietnam, when the official channels of gold import are limited, there will be unofficial channels of unofficial channels, these channels exist very diverse form. CHAPTER 3: MODEL FOR ASSESSING THE IMPACT OF STATE MANAGEMENT POLICIES ON THE GOLD MARKET WITH MACRO ECONOMIC VARIATIONS 3.1. Research design 3.1.1. Research models Inheriting the views of the views of other models, the author chooses 6 variables: Domestic gold price, International gold price, National foreign exchange reserve, Average deposit interest rate under 12 months of Vietcombank, USD / VND exchange rate of Vietcombank, Inflation Vietnam (CPI). The variables of the model are converted into a first order difference of natural logarithms instead of being absolute values. 3.1.2. Study samples, research data and analytical methods The observed sample consists of 132 observations (11 * 12 months) from January 2006 to December 2016, the variables VNGOLD, INTERGOLD, INTEREST, VCBXRATE were taken averagely monthly, VNCPI, FRES variables were taken according to month. The price analysis of data splits into 2 phases from January 2006 to the effective date of Decree 24 (April 2012) and the period since Decree 24 was officially implemented, the SBV officially tightened management. gold market management in May 2012 to 12/2016 to clarify the relationship between exchange rates and gold prices in these two sections. The dissertation uses the VAR - Vector Autoregression to analyze the impact of state management policies of the gold market. The EVIEW9 software is used for analysis of the above model. System of estimated equations The estimated model consists of a system of equations as follows: GOLDVNt = α1 + + + + + + ε1t k: Hysteresis value 14 α, γ, , , ε : square coefficient matrix of the equation 3.3. Results of running the model and discussion 3.3.1. Stationary test and lag in model (i) Stationary test Performing ADF Test for VAR model, all variables VNGOLD, INTERGOLD, FRES, INTEREST, VNCPI, VCBXRATE all stop at the first level difference with significance level of 1%. Therefore, according to Sim, C.A (1980), the above variables can be used in the VAR model. (ii) Choose lag in VAR model The results show that the FPE, AIC, SC, and HQ tests all give a lag of 1, while the LR test is 5. Therefore, the author chooses the optimal lag of 1 for the VAR model of phase 1 (due to have more statistical test numbers). The results show that the FPE SC and HQ tests all give lag of 0, and LR and AIC tests are 6. Empirically, any policy has a certain lag, so the study continues. Use the Portmanteau test to determine the optimal lag. Portmanteau test for VAR model shows that the optimal level of VAR 2 stage model is 1. Therefore, the study will use VAR 2 phase model with an optimal lag of 1. 3.3.2. Test autocorrelation of the residuals and stationary of model (i) Test autocorrelation of the residuals We have a phase 1 VAR model with lag of 1 with no autocorrelation. We have a phase 2 VAR model with lag of 1 with no autocorrelation. (ii) Test stationary of model Using the AR ROOT TEST test, we have both the VAR model of 2 stages 1 and 2 with lag of 1 which has passed the basic tests so it can be applied in analysis and forecasting. 3.3.3. Impulse-Response analysis result (i) Relationship between exchange rates and domestic and international gold prices - Impulse-Response function between VCBXRATE and VNGOLD, INTERGOLD of VAR model phase 1 15 The results of the reaction show that before the issuance of Decree 24/2012 / ND-CP on gold business management, at the time of the domestic gold price increase shock with a magnitude of one standard deviation. Vietcombank's selling rate also increased by 0.2%, international gold price increased by 1 standard deviation, Vietcombank's selling rate increased by 0.5%. - Impulse-Response function between VCBXRATE and VNGOLD, INTERGOLD of VAR model phase 2 In contrast, the results of the Impulse-Response in the picture above show that after the issuance of Decree 24, the exchange rate turned back when there was a shock of gold price increase. The relationship during the period from May 2012 to December 2016 was that the domestic gold price increased by 1 standard deviation, the selling rate of Vietcombank decreased by 0.10% after 1 month and quickly balanced again in When the international gold price increased by 1 standard deviation, Vietcombank's exchange rate decreased by about 0.03%, but the reaction occurred at the time when the gold price increased (without delay). This proves that the relation between the exchange rate and the world gold price after Decree 24 is the negative relationship and the reaction of the exchange rate with the world gold price faster than domestic gold price. Thus, the application of Decree 24 has changed the nature and direction of the relationship between exchange rates and domestic (international) gold prices.. Phase 1 Phase 2 16 (ii) Relation between CPI and domestic gold price Phase 1 Phase 2 When there is a shock about gold price, the CPI does not change immediately but it will tend to peak at 2 months, then decrease gradually within 6-7 months. However, in phase 2, the fluctuatio