ISTANBUL 

High inflation levels prove to be persistent in some frontier markets, less advanced economies in the developing world, the Fitch Ratings said Thursday in a statement.

"Annual inflation rates in Frontier Markets (FM) have generally moderated in recent months, but there are a handful of countries where that outcome has been less favourable with CPI inflation rates proving sticky or showing outright increases," it said.

"The diverging trend is resulting in contrasting monetary policy steps with several FM central banks loosening policy rates while others take the opposite stance," it added.

Easing CPI, consumer price index, levels led central banks to cut policy interest rates in Armenia, Azerbaijan, Costa Rica, Georgia, Mongolia, Mozambique, Pakistan, Rwanda and Tajikistan, said the rating agency.

However, CPI inflation in Nigeria annually rose 34% in May with the central bank lifting policy rates by 150 basis points to 26.25%, while the National Bank of Angola also raised rates to 19.5% from 19% as inflation showed an annual gain of 30.2% in May.

The Bank of Zambia also raised its monetary policy rate by 100 basis points to 13.5% in order to contain inflationary pressures, and Bank of Papua New Guinea increased its facility rate by 50 basis points to 2.5% due to expectations of higher inflationary pressures, said the agency.

Fitch added that while international reserves of some FM countries are stable or growing, there are some exceptions where the decline has been significant in recent months, such as in Bolivia and Georgia.