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 ...