The Reserve Bank of India is expected to raise its repo rate to 5.50 percent this week, a majority of economists polled by Reuters said. The central bank’s monetary policy committee meets from October 5 to 7.A 25-basis-point hike would be the first increase since February 2023. In a September poll, 35 of 61 economists backed the move, with most seeing one more hike in December.Inflation is the trigger.

Consumer prices rose 4.82 percent in August, above the RBI’s 4 percent target for the third straight month. Energy and food costs are driving the rise, and nearly half the inflation basket is growing 4 percent or faster.Growth gives the RBI room to act. The economy expanded nearly 8 percent in the April-June quarter.

Bank credit grew more than 19 percent in July, pointing to strong demand.Global pressure adds to the case. The US Federal Reserve has been raising rates as energy prices spike. Governor Sanjay Malhotra and other policymakers have signalled they favour a hike if price pressures broaden.