Consistent dollar demand from importers, mainly oil refiners, following higher crude oil prices, has kept the rupee under pressure.
The greenback also shot to its highest so far this year on the yen and an all-time high against the Indian rupee.
A September 19-25 Reuters poll showed 35 of 64 respondents expect a rate hike on Friday.
The Indian rupee plunged as much as 0.64 per cent to a fresh record low of 73.813 against the dollar after hitting an all-time low on Wednesday.
While no changes have been made to the repo rate, the bank has changed its stance from "Neutral" to "Calibrated Tightening".More news: Erdogan claims U.S. pastor has 'dark links' to terrorists
MARKETS ON EDGE The RBI is also expected to assure markets that adequate funds are available after investors panicked when a series of debt defaults by Infrastructure Leasing & Financial Services (IL&FS) led to redemption pressure at other companies in the shadow banking sector.
"Fuel and gas prices are on fire and markets are scurrying".
The 10-year benchmark bond yield has risen by 50 basis points to 8.20 per cent since the last policy-making meeting in August.
"The RBI policy announcement of keeping rates unchanged is a surprise", said Abhimanyu Sofat, head of research, at brokerage firm IIFL Securities Ltd, adding that if crude prices continue to surge then RBI may have to may have to frontload rate hikes.
Analysts ruled out chances of a cut in the central bank's cash reserve ratio (CRR) on Friday.
US Treasury yields jumped to multi-year peaks on Wednesday, with the 10-year yield reaching a seven-year high after Wednesday's robust data bolstered the case for the Fed to raise interest rates again in December and beyond.