The Reserve Bank of India is expected to raise its benchmark repo rate by 25 basis points to 5.50 percent this week, the first increase since February 2023, polls of economists show.

In a Reuters poll of 61 economists, 35 expected the Monetary Policy Committee to lift the rate at its October 5 to 7 meeting. The repo rate has stayed at 5.25 percent across the last four reviews.

Inflation accelerated to 4.82 percent in August, exceeding the RBI’s 4 percent medium-term target for the third straight month. The rise was driven by higher energy and food costs.

Brent crude has climbed above $100 a barrel on West Asia tensions, while the rupee crossed 96 to the dollar earlier in the week. Both add to imported inflation pressure.

“Inflation is tracking higher than the RBI’s forecast by about 20 basis points for the current quarter, and the rise is fairly broad-based,” said Abhishek Upadhyay of ICICI Securities Primary Dealership.

A 25-basis-point hike would make home, vehicle and business loans marginally costlier. Some economists, however, still expect the RBI to hold.