It is just show of strength.... they are bent on getting their way & that is what it is.....by hook or by crook they will get QE-3....free money to trade.....instead of lending ....!!!
Maybe even bring about a minor recession to get the authorities to release funds for the stimulus ???
And then the stimulus money will get siphoned off from the system and they will be back with the bowl...for QE4.
This, in short, seems to be RBI's dilemma. They lowered the rates too fast for the earlier stimulus packages in 2008-2010. Then they tightened it too fast. Now they are in a conundrum. There is a need for liquidity, but no logical/ economic reason to.
Let's see what the rumors yield. A spike in BNF, maybe