UPDATE 2-Vietnam actions welcome, more may be needed-IMF

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By Lesley Wroughton

WASHINGTON, June 30 (Reuters) - Measures by Vietnam officials to control inflation and a widening trade imbalance are welcome, but may not be enough to boost market confidence, a senior International Monetary Fund official said on Monday.

Shogo Ishii, assistant director in the IMF's Asia and Pacific Department, denied market reports that Vietnam was seeking an IMF loan program to avoid an economic crisis.

"I can confirm that the authorities have not indicated any interest in a future fund program," Ishii said in an interview. "We have never even discussed one."

The IMF and member governments are sensitive to such speculation because it can be seen as sign of economic trouble and may send investors scurrying for a safe haven.

Vietnam's stock market has fallen nearly 50 percent this year and its dong currency and economy are under pressure from inflation, which hit 26.8 percent in June due to rising food prices.

The central bank said the dollar/dong exchange rate VND= was more stable after it doubled the daily trading band last week in the face of mounting selling pressure on the currency.

Vietnam's trade deficit, which is raising pressure on the dong, nearly tripled for the six months through June to $14.78 billion. Faced with an overheating economy, the government cut its 2008 growth target to 7 percent from 8.5 to 9 percent.