Hanoi, Apr 1 (IANS): The State Bank of Vietnam said it would cut the refinancing rate by 50 basis points to 5.5 per cent from April 3 in the latest policy move to support economic growth.

The discount rate will be kept unchanged at 3.5 per cent and the overnight lending rate in the inter-bank market will remain at 6 per cent, the central bank said in a statement.

After the release of official data showing Vietnam's economic growth slowed to 3.32 per cent in the first quarter, lower than an annual expansion of 5.03 per cent in the same period a year earlier, the central bank signaled it might cut its policy rates further to support growth, reports Xinhua news agency.

Vietnam's inflation in March down 0.23 per cent from February might help give the central bank more room for the rate cuts.

The central bank also said it would lower caps on interest rates of deposits in Vietnamese dong by 0.5 percentage points to between 0.5 per cent and 5.5 per cent for maturities below six months.

The ceiling on interest rates for short-term loans in some priority sectors will be cut further to 4.5 per cent from 5 per cent.

Vietnam's central bank said a "flexible" monetary policy during global uncertainty would help support economic stability and strike a balance between growth and inflation.

The Southeast Asian country has set the target of keeping economic growth at 6.5 per cent and inflation below 4.5 per cent this year.