UPDATE 1-Vietnam Money-Cenbank expects forex surplus in 2008

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HANOI, Aug 11 (Reuters) - Vietnam's central bank said on Monday it expects a surplus in foreign currency supply and a stable dollar/dong exchange rate this year, helped by higher remittances and the inflow of foreign direct investment.

"The State Bank will continue to manage the exchange rate with flexibility based on the market situation and maintain relative stability of the rates in order to promote exports and limit imports," Governor Nguyen Van Giau was quoted as saying on the government's website (www.chinhphu.vn).

Giau said there were sufficient foreign exchange funds to cover a $20 billion trade deficit expected in 2008.

The Foreign Investment Agency had forecast disbursement for foreign direct investment projects this year to jump nearly 38 percent from 2007 to a record $11 billion. New pledges would more than double to $50 billion compared with last year.

Remittances from Vietnamese working overseas have also been forecast to reach a record $8 billion this year.

The Southeast Asian country's trade account has been under massive pressure this year as raw material prices soared but the trade gap has been narrowing after the government capped imports, especially consumer products such as cars and mobile handsets.

Still, January-to-July's accumulated deficit was double the same period last year at $15 billion, government data showed.

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