More commercial banks have cut deposit interest rates for the US dollar by 0.1-0.4 percentage points, showing that the State Bank's tighter rules on dollar lending are taking effect.

Sacombank is offering 4.62 percent per year for six-month deposits under 10,000 USD and 4.5 percent for all other terms above and below six months for the same amount.

For bigger deposits, the highest interest rate is 4.88 percent for two, three month terms and less than 4.7 percent for all other terms. Terms deposits under a month are being offered less than 1 percent.

The state-owned Agribank has cut its highest interest rate from 5.55 percent to 5.3 percent for a nine-month term. Terms of 18-24 months would earn 4.7-4.8 percent; all other terms 5-5.2 percent.

Earlier, Eximbank, Kienlong Bank, VietinBank, PG Bank, SeABank, VietABank have cut dollar deposits interest rates by 0.1-0.25 percentage points.

"The reduction is not so strong because banks are very cautious to balance capital as well as see the effects of the Government's policy in the inflation fight," said Nguyen Thanh Toai, deputy general director of Asia Commercial Bank.

Some banks have plenty of dollars but have to restrict their loans.

The downward trend in the dollar interest rate came after the central bank tightened dollar lending rules, allowing only short-term funding to be extended to exporters. Importers will be able to use all types of loans if they can prove their repayment abilities.

The regulation, effective from May 9, is aimed at stopping the upward trend in US dollar interest rates which occurred in early March after the central bank delivered a strong message to keep the Vietnamese dong ceiling deposit rate at 14 percent per year.

In March, Vietnam's inflation hit 13.89 percent, the biggest annual increase in 25 months, despite monetary tightening and plans for scaled back fiscal spending./.