NEW DELHI : The Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.5% on Wednesday, marking its first increase since February 2023 as inflationary pressures intensified.

The increase could push up borrowing costs, including repayments on floating-rate loans linked to the repo rate, depending on how lenders adjust their interest rates.

All six members of the Monetary Policy Committee voted to raise the rate from 5.25%. The central bank also shifted its policy stance from “neutral” to “calibrated tightening”, signalling that further increases remain possible.

Governor Sanjay Malhotra said the timing and extent of additional increases would depend on inflation and economic conditions. The change in stance does not commit the RBI to a series of hikes, he said, with future decisions allowing for either an increase or a pause.

The RBI raised its inflation forecast for the current financial year to 5.2% from 5%, while projecting economic growth of 7.1%.

Consumer price inflation accelerated to about 4.8% in August, above the central bank’s 4% target, as rising energy costs added to price pressures.