By Vuyani Ndaba
JOHANNESBURG (Reuters) - The Central Bank of Nigeria is set to raise its benchmark interest rate to 24.75% on Tuesday and keep it there for the rest of the year, a Reuters poll forecast, a move analysts reckon will be enough to slow inflation and bring dollar inflows.
Last month the central bank delivered its largest interest rate hike in around 17 years, adding 400 basis points, yet seven of 13 analysts said it would add another 200 basis points later on Tuesday and take the key rate to 24.75%.
The rest were divided between no move, just a 50 basis point (bps) lift, 125, 150 or a bumper 225 bps increase.
Nigeria's inflation quickened to 31.70% in annual terms in February, a 28-year high.
Tatonga Rusike, BofA's sub-Saharan economist, said a cumulative 600 basis points of hikes would help bring inflation down to 25% by end-year and likely inflows would support naira stabilisation, Eurobond market access and potential World Bank support.
"The inflows could help reduce official FX backlogs and mismatches in the FX market," he added.
Nigeria is looking at proposals for a Eurobond issue, Finance Minister Wale Edun said on Monday, saying falling interest rates were making international debt issues more affordable.
Africa's largest economy has borrowed from international creditors, including the World Bank, but has not tapped the Eurobond market since a $1.25 billion issue in 2022.
Nigeria has struggled to attract dollar inflows from its main export source of oil revenues since a commodity price slump around 2015 which it never really recovered from, seen in lower oil production levels.
The naira did somewhat recover after last month's hike in rates and some analysts are now taking a more constructive view on the currency after the central bank's strong show of intent in February.
It firmed after the central bank said on Wednesday it had cleared its entire verified foreign exchange backlog.
Fellow continental peer, the Bank of Ghana kept its main interest rate at 29.00% on Monday, saying the inflation outlook had worsened slightly over the past two months and required close monitoring.
South Africa's Reserve Bank is expected to keep its repo rate steady at 8.25% on March 27, all 23 economists unanimously forecast in another Reuters poll, and wait until the third quarter before cutting.
(For other stories from the Reuters global economic poll:)