Africa’s top oil-producing countries, Nigeria and Angola, have been named among nations with the highest inflation rates in the frontier market with higher interest rates.

The annual inflation rates in frontier markets (FM) have remained moderate in recent months.

Although the annual inflation rates in FM have remained moderate in recent months, there are a few countries where that outcome has been less favorable, with consumer price index (CPI) inflation rates proving sticky or showing outright increases, as highlighted in Fitch Ratings’ latest Frontier Vision chart pack.

This diverging trend has resulted in contrasting monetary policy steps, with several frontier markets' central banks loosening policy rates while others take the opposite stance, a Fitch report said.

But rate loosening hasn’t been part of the monetary policy play in Nigeria, where inflation accelerated to a multi-year high of 34% in the month of May.

Due to base effects, analysts, however, predicted that inflation pressure would ease in June 2024.

Fitch Ratings noted that easing CPI inflation rates led central banks to cut policy interest rates in Armenia, Azerbaijan, Costa Rica, Georgia, Mongolia, Mozambique, Pakistan, Rwanda, and Tajikistan.

On the other hand, the global rating agency noted that inflation in Nigeria surged to an exceptionally high level of 34% year-on-year in May. In response, the central bank raised policy rates by 150 basis points, bringing them to 26.25%.

EAN/SA

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