mumbai, Oct. 5 -- The Reserve Bank of India (RBI) is expected to raise interest rates this week for the first time since February 2023, as a sharp shift in the global rate environment and rising inflation risks push the central bank towards monetary tightening. The Monetary Policy Committee (MPC) may raise the key repo rate by 25 basis points to 5.50% on 7 October, according to nine of 10 economists surveyed by Mint, with only one respondent expecting a pause. All expect the rate-setting panel to retain its neutral stance, signaling that the central bank wants to keep its options open rather than commit to a prolonged hiking cycle. The expected hike comes as a surge in global commodity prices threatens to fan inflation, which rose to a 22-month high of 4.8% in August-above the central bank's 4% midpoint target. Consumer prices are also under pressure from a deficient monsoon and imported inflation amid a weakening rupee. "Since the last policy, the global environment has completely changed with higher rates and growth holding up along with a build-up of inflation," said Sameer Narang, chief economist at ICICI Bank. "Inflation in Q2 should be above RBI's trajectory with below-normal monsoon pushing food prices higher. However, the global environment may change once again, which doesn't call for committing to any path because of which stance change may not be required," Narang said. Rising inflationary pressures and a wave of rate hikes by global central banks, including the US Federal Reserve, have led economists to move up their expectations for India's rate increases from December or February. "There are two reasons why we are changing the timing of rate hikes to October and December (25 basis points each), from our earlier expectation of December and February 2027 of 25 bps each, attuned to the current reality of elevated global oil prices, we expect upward revisions to both the growth and inflation forecasts, which offer a solid backdrop to commence a monetary tightening cycle," Barclays said in a report on 1 October. The inflation outlook is the clearest reason for the expected hike....