HANOI, Nov 9 (Reuters) - Vietnam's currency, the dong, traded near the psychological level of 19,000 dong per dollar on Monday on the unofficial market as gold traders sought more dollars to pay for imports. Currency dealers at banks and in gold shops in Hanoi said a widening spread between domestic and international gold prices over the past week had triggered cross-border gold smuggling. Hanoi banned gold imports in May last year as it sought to conserve foreign exchange and contain the country's quickly widening trade deficit, which sent the dong to an all-time low of 19,400 dong per dollar in June 2008. At 0400 GMT the dollar could buy 18,920 dong on the unofficial market, just 80 dong shy of 19,000, which dealers said was touched briefly on Saturday. "Demand for dollars from gold importers is on the rise so we expect the dollar will keep rising against the dong this week," one dealer in Hanoi said. On Sunday, the newspaper Tuoi Tre quoted State Bank Governor Nguyen Van Giau as denying a rumour that the central bank would widen the trading band for dollar/dong transactions. Giau also advised residents against buying the greenback to "avoid losses" after the dollar hit 19,000 dong on Saturday. "Between now and the end of 2009 the State Bank will adjust the interbank exchange rate at reasonable levels suitable to signals from the market and serving the target of stabilising the value of the Vietnam dong," it quoted Giau as saying.
(Reporting by Nguyen Nhat Lam; Editing by John Ruwitch)
