"Decision-makers agreed that upside risks to price stability persisted. In members' assessment, the increase in risk aversion vis-a-vis emerging markets and potential second-round effects following the restart of the economy posed the greatest risk in terms of inflation developments," the minute of the meeting released on Wednesday show.

"Some members also noted that a general pick-up in the global economy and the significant rise in commodity prices in 2021 might result in further spikes in inflation," according to the minutes.

Policymakers agreed that the successful reopening of the economy was "largely affected" by inflation developments, "therefore, the appropriate response had to be given to increasing
upside risks to price stability".

Council members agreed that an increase in inflation was "primarily shaped by temporary effects" and augured a "more pronounced" fuel price effect in April and May, because of a low base and rising oil prices early in 2021, but reiterated that CPI would return to the central bank's 3% +/- one-percentage-point tolerance band "in the summer months".

The Central Statistical Office (KSH) released April CPI on May 11. Headline inflation for the month climbed to 5.1%.

Council members agreed that the MNB's next quarterly Inflation Report, which they will discuss at a policy meeting in June, would be "key" to assessing inflationary risks linked to the reopening of the economy.

The Council voted unanimously at the meeting on April 27 to keep the central bank base rate unchanged at 0.6%.