Even though the fall in oil prices has created some space to ease rates, HSBC said it expects RBI Governor Raghuram Rajan to maintain status quo in the forthcoming policy review and wait for the fiscal roadmap presented in the Budget.
"We do not think RBI will cut rates on February 2," it said in a note.
"The Budget on February 29 should show how this extra space will be shared between monetary and fiscal policies," the report noted.
The RBI will also be closely watching the Budget fine print, it said, adding its effect on inflation and financial stability will be closely watched.
Additionally, there are other factors governing inflation which will play out in the next few weeks, like the arrival of the Rabi crop, it said.
"The current instability in markets and insufficient transmission (by banks) are further reasons why the RBI may not rush to cut the rate on February 2," HSBC said.
The RBI is most likely to achieve its January 2016 target of having inflation under the 6 per cent mark, but is committed to getting the headline number down to 4 per cent in two years from now.
"While the tone (of the policy) is likely to be dovish, the RBI, in our view, will also take a moment to remind markets of its medium-term 4 per cent CPI target, suggesting that any additional space that does open up will be measured," HSBC said.
The RBI cut rates by a total of 1.25 per cent in 2015, including one within a week of the last Budget, after switching the stance of the policy to be accommodative and address sagging growth.
HSBC said Rajan will reiterate the accommodative stance on February 2 and will be in a position to deliver a cut at the April review, provided the Budget meets his expectations.
"We continue to forecast a 0.25 per cent rate cut in the April policy meeting under the assumption that the Budget will be responsible. Thereafter, if oil stabilises at around USD 40 a barrel for FY17, space for a further 0.25 per cent rate cut could open up," it added.