Over the last two weeks, the RBI has lifted short-term rates to help support the currency
The government's cash balance is "quite substantial", which is an indicator of excess idle money with it.
Monetary policy committee had recommended no change in the key rate.
The RBI cut interest rates on Friday by a quarter point for the third time since January.
Majority of the experts expect a 25 basis point reduction.
It's affecting deposits, too.
It is increasing the dependence on foreign investments.
New Delhi plans to cut public spending by up to 10 percent in the fiscal year starting in April, officials involved in the budget preparations told Reuters last week, as Finance Minister P Chidambaram struggles to bring down the fiscal deficit to 4.8 percent of gross domestic product and stave off a credit rating downgrade.
Due to a spike in crude oil prices and the govt's high fiscal deficit
Central bank estimate economy to grow at 5.5 per cent.
India imports 80 percent of its oil, which adds to inflationary pressure.
Remarks come at a time when he is under pressure from the govt to cut interest rates.
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