UPDATE 1-Vietnam says no plans for currency devaluation

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HANOI, June 6 (Reuters) - Vietnam's government has no plans to devalue the dong in spite of the forwards markets pricing in a sharp depreciation in the value of the currency one year from now, the country's second-largest bank BIDV said on Friday.

The government also has sufficient foreign currency reserves to meet investors' demands to convert their funds into dollars, Prime Minister Nguyen Tan Dung was quoted as saying in the bank's statement.

Vietnam will strive to reduce its inflation to single digits by 2010, Dung told BIDV Chairman Tran Bac Ha and JPMorgan's Head of Economic and Sovereign Research, David Fernandez, at a meeting on Thursday, BIDV said.

Vietnam's economy and the dong are under pressure from inflation running at more than 25 percent and rising imports.

The country's overall balance of payments for the first five months of the year was a surplus $1 billion, Dung said.

"Given the current forex surplus, the prime minister believed that the dollar/dong trading band should be adjusted in a flexible manner in both directions," the statement quoted Dung as saying of the current daily band of +/-1 percent.

In the short term, the band could be changed to come close to the +/- 2 percent as projected by the government, he said.

Analysts said the remarks would help calm market jitters over recent volatility.