ABUJA, May 25 (Reuters) – The bid-ask spreads on Nigerian bond yields widened up to 15 basis points on average on Wednesday from 5 basis points before a surprise central bank rate hike a day earlier.

The benchmark 2042 bond bid-ask spread widened as much as 35 basis points, as yields also rose, traders said.

The central bank raised benchmark interest rate by 150 basis points to 13% on Tuesday, its first hike in more than two years, to combat rising inflation, sending markets tumbling.Read full story

Traders said the central bank sold the one-year Treasury bill at 6.49% after investors demanded the debt at a rate as high as 10.25%. This compares with a yield of 4.75% the one-year maturity fetched at a previous auction.

The main share index .NGSEINDEX gained 1.24% on Wednesday, recovering from a two-week low triggered by the rate decision. The index has been rising this year as local investors pile into equities in the wake of double-digit inflation.

(Reporting by Chijioke OhuochaEditing by James Macharia Chege and Sam Holmes)