HANOI: Vietnam’s central bank said on Friday it will increase gold bar supplies to stabilise the market as domestic prices have been much higher than global prices.

The price of gold in the Southeast Asian country has gained significantly this year, reaching 85 million dong ($3,401.36) per tael on Friday, while on the global market each tael was trading at 2,388.

One tael is equivalent to 37.5 grams or 1.21 troy ounces. The State Bank of Vietnam (SBV), the central bank, said in a statement it had prepared plans to intervene in the market. “For the gold bar market, SBV will increase supply to deal with the high difference between domestic and global prices,” SBV said.

It did not say if it would import gold bars as part of its plan to increase supply. Prime Minister Pham Minh Chinh late on Thursday had ordered the central bank to act immediately to reduce the difference between domestic gold bar prices and global ones.

He also made a similar request late last year as the rapid increase in gold bar prices damaged market sentiment. Can Van Luc, an adviser to the government, said the central bank’s decision was “a good move”. “The main cause of the difference was the imbalance between supply and demand,” he said.

Under Vietnamese regulations issued in 2012, the state has the exclusive right to produce gold bars, export and import raw gold to produce gold bars to limit the impact of gold price fluctuations on exchange rates, inflation and macroeconomic stability.

Local businesses have urged the SBV to amend the regulations in light of the current situation.

Earlier this week, the Vietnam Gold Business Association proposed to allow three leading businesses - PNJ, SJC, DOJI - to import 1.5 metric tons of gold per year, state-run Dan Tri newspaper reported. In Friday’s statement, the SBV also said it was ready to act to prevent any cross-border gold smuggling that sought to take advantage of the soaring prices.