(Reuters) - Nigeria's central bank unexpectedly raised its benchmark lending rate by 25 basis points on Tuesday, wrong-footing analysts as it switched its attention from boosting growth to battling inflation.
Central bank governor Lamido Sanusi has tended to put economic growth in Africa's biggest oil producer ahead of keeping a lid on price rises, particularly after a near collapse of the banking system last year.
However, Sanusi said reforms introduced since he bailed out nine banks a year ago meant there was now leeway for monetary tightening, raising the benchmark interest rate to 6.25 percent from 6.0 percent in the first hike in more than a year.
"The committee is satisfied that sufficient progress has been made in banking sector reforms to mitigate the risk of monetary tightening to financial institutions," he told a news conference in the capital, Abuja.
He also narrowed the interest rate lending and deposit corridor for commercial banks that sits either side of the bank's benchmark level by lifting the deposit rate to 3 percent below the benchmark from 5 percent previously.
Analysts said the two moves -- effectively a raising of official deposit and lending rates to 3.25 and 8.25 percent respectively -- showed resolve to tame inflation that quickened to 13.7 percent year-on-year in August from 13.0 percent the previous month.
This comes after the State Bank Of India increased their benchmark lending rates by 0.5% in August and Canada increased their benchmark lending rates in June - both seemingly bothered about inflation on the back of strong growth.
However the Federal Bank reiterated that it would keep the benchmark lending rate in a range of zero to 0.25 percent "for an extended period."
