A Reuters poll of economists had predicted a much smaller 50 basis point hike.

The rate decision comes after annual inflation rose for a seventh straight month in August, to 20.52% from 19.64% in July.

At its last monetary policy meeting in July, when it raised its policy rate by 100 basis points, the central bank warned that it would continue tightening policy if inflation rose further.

"The MPC (Monetary Policy Committee) noted that a tight policy stance would help consolidate the impact of the last two policy rate hikes, which is already reflected in the slowing growth rate of money supply," Central Bank of Nigeria Governor Godwin Emefiele told a news conference.

"It also felt that an aggressive rate hike would slow capital outflows and likely attract capital inflows and appreciate the naira currency," Emefiele added.

High inflation, weak economic growth and mounting insecurity are major issues for voters as Africa's biggest economy heads for a national election in February, when incumbent President Muhammadu Buhari will step down.

Responding to reporters' questions, Emefiele declined to rule out further rate hikes to fight inflation.

(Reporting by MacDonald DzirutweWriting by Alexander WinningEditing by James Macharia Chege)

By MacDonald Dzirutwe