SAINT PETERSBURG, RUSSIA – 2023/11/02: The national flag of the Federal Republic of Nigeria as a participating country at the 12th St. Petersburg International Gas Forum (SPIGF 2023). (Photo by Maksim Konstantinov/SOPA Images/LightRocket via Getty Images)

ABUJA, May 21 (Reuters) – Nigeria’s central bank raised its benchmark lending rate by 150 basis points to 26.25% from 24.75% NGCBIR=ECI, in a decision announced on Tuesday.

Analysts had widely predicted another hike given inflation has continued to soar and the local naira currency NGN=D1 has been highly volatile.

The decision is the third rate increase this year, after hikes of 200 basis points in March and 400 basis points in February.

Inflation reached a 28-year high of 33.69% year-on-year in April NGCPIY=ECI, spurred by the government slashing petrol and electricity subsidies and twice devaluing the naira.

(Reporting by Chijioke Ohuocha, Elisha Bala-Gbogbo, MacDonald DzirutweEditing by Bate Felix)