(Adds central bank rate decision)
By Luc Cohen
BUENOS AIRES, April 11 (Reuters) - Argentina's central bank reversed course and raised its policy rate by a sharp 150 basis points on Tuesday, after government data showed consumer prices rose a higher-than-expected 2.4 percent in March.
The March figure, published by the official Indec statistics agency on Tuesday, was little changed from February's 2.5 percent rise in consumer prices and was above median expectations in a Reuters poll for a 2.0 percent rise.
Inflation hit 40 percent in 2016 in Latin America's third-largest economy and has remained stubbornly high so far this year as President Mauricio Macri's government cuts subsidies for electricity and home-heating natural gas as part of efforts to close a gaping fiscal deficit.
Argentina's central bank, whose policy hike on Tuesday brought the interest rate to 26.25 percent, is targeting inflation between 12 and 17 percent for 2017. Last week, central bank President Federico Sturzenegger said March inflation figures had convinced the board of the need to tighten monetary policy.
Private estimates for inflation are substantially higher. Economists' expectations for 2017 rose to 21.2 percent in a poll published by the central bank earlier this month, up from 20.8 percent a month earlier.
The interest rate hike comes after nearly a year of steady or falling central bank policy rates, following sharp hikes in early 2016 to control inflation.
The March inflation rate was in large part due to changes in seasonal and regulated prices, as prices for education services rose 5.6 percent with the start of the school year.
Prices for home fuels and basic home services rose 10 percent as cuts to subsidies for electricity announced earlier this year continued to kick in. Food and drink prices rose 3 percent.
In a statement, the central bank said April inflation "could continue at a higher level than is compatible with the path established by the monetary authority."
"The central bank considers it appropriate to harden liquidity conditions with the aim of ensuring that the disinflation process in the coming months is consistent with the targets for this year," it added.
Sturzenegger had warned as early as February that the three months from February through April would be "delicate" due to cuts to subsidies for electricity and home-heating natural gas. (Reporting by Luc Cohen; Editing by Alistair Bell and Leslie Adler)