The Reserve Bank of India (RBI) should refrain from making any cut in interest rates until inflation is curbed even as the government wants the central bank to cut rates to boost economic activity, the International Monetary Fund (IMF) said.

In a statement released yesterday, the IMF said that the Indian economy was suffering high fiscal deficit and elevated inflation and it was in a weaker position than before the global financial crisis.

Commenting on the country's economic condition, the IMF added, "It is advisable to maintain the current level of policy rates until inflation is clearly on a downward trend."

The Washington-based lender has highlighted a similar stance as what the RBI governor has long been saying - that room for cutting key interest rates is limited due to high inflation.

Inflation rate exceeding 7 per cent has limited the RBI to just two interest-rate cuts since the beginning of April 2012, even as the government is preparing to report the slowest pace of growth in a decade.

As per the international lender's estimates, rate of inflation will ease 7.8 per cent in March this year to 7.2 per cent by March next year, while the budget deficit may be 5.6 per cent of GDP this fiscal year, above the government's goal of 5.3 per cent.

Separately, a recent survey has found that the European Central Bank (ECB) will most probably maintain its benchmark interest rate unchanged at all-time low of 0.75 per cent, that the Bank of England will keep its benchmark interest rate at 0.5 per cent.