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(Adds more inflation detail and context paragraphs 3-7)
LUSAKA, Feb 15 (Reuters) - Zambia's central bank raised its key interest rate on Wednesday for the first time since November 2021, increasing it by 25 basis points to 9.25% as it cited a deteriorating outlook for inflation.
The Bank of Zambia said inflation was now expected to remain above the 6%-8% target band throughout the forecast horizon, which runs until the last quarter of next year.
That contrasts with forecasts in November 2022 which indicated that inflation would return to the target range in the first quarter of 2024.
In January, annual inflation was 9.4%.
Central bank governor Denny Kalyalya told a news conference inflationary pressures were linked to the swift, recent depreciation of the country's kwacha currency, an anticipated increase in electricity tariffs and a possible reduction in maize output.
Zambia, a major copper producer, was the first country in Africa to default on its sovereign debt during the COVID-19 pandemic, and debt restructuring negotiations with its creditors have been delayed.
"Negative sentiments arising from the protracted debt restructuring negotiations, working through the exchange rate channel, are expected to add to inflationary pressures," the bank said. (Reporting by Chris Mfula Editing by Alexander Winning and Helen Popper)