Kittiratt disagrees with move to control gold trade
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has said he is not in favour of any moves to regulate trading in gold as the metal has become an asset in place of currencies and hence should be treated alike.
However, the Ministry of Finance has set up a working group to oversee gold trade, the Bank of Thailand said, even as the Finance Minister insisted the government has no plan to control gold imports and exports.
Kittiratt said that it would be good if gold was imported and people accumulated it as an asset. Gold speculation goes together with the mechanism.
"We have to oversee [the market] to ensure there is no volatility," Kittiratt said.
He said the government had no concerns about the country having a trade deficit because of gold. He said having two sets of trade and current accounts – one with gold imports and another without gold imports – would give a better idea.
Meanwhile, central bank Governor Prasarn Trairatvorakul said a working group chaired by Fiscal Policy Office director-general Somchai Sujjapongse
would consider gold traders’ proposals at its first meeting in October. Among the proposals are the setting-up of a local gold trade centre to lessen foreign exchange risks.
"I want the working group to give details," Prasarn said.
He declined to give a certain figure for spot gold trade, but said the figure could be high. In the first six months of this year, net gold imports amounted to about US$10 billion (Bt310 billion).
According to a report by the Department of International Trade Promotion for the first eight months of 2013, Thailand suffered a trade deficit of $18.15 billion.
In the corresponding period, total exports rose 1.03 per cent year on year to $152.84 billion, while imports increased 3.10 per cent to $170.98 billion. Gold imports jumped 45.7 per cent.
Meanwhile, a gold trader who did not want to be named, said they agreed with the proposal to set up a committee to investigate gold trading. He, however, added that they needed to meet the Bank of Thailand directly to explain the real gold trade environment and that the gold market was not involved in currency speculation.
"When the committee issues rules to control the market, it will have a direct impact on gold traders. Hence, it is important they get the information directly from gold traders before issuing any rule to control the market," he said.
The Bank of Thailand early this week announced that it plans to control the gold market, but no representative from the central bank has yet met the gold traders, the source added.
