The rupee was at 83.4750 against the U.S. dollar as of 09:20 a.m. IST, barely changed from its close of 83.4725 in the previous session.
The RBI is widely expected to keep rates unchanged and maintain its tighter policy stance in its decision due at 10:00 a.m. IST.
Traders reckon the rupee is unlikely to have much of a reaction to the RBI's policy decision and instead will be driven by how flows related to local equities pan out.
Foreign investors have pulled out USD 2.8 billion from Indian equities over the last three sessions after the national elections delivered an unanticipatedly weak victory margin for Prime Minister Narendra Modi's alliance.
The dollar-rupee pair is "expected to remain volatile but within a range of 82.90 to 83.70, with 83.10-82.90 as the buying zone," Amit Pabari, managing director at FX advisory firm CR Forex said.
Meanwhile, dollar-rupee forward premiums declined, with the 1-year implied yield down 1 basis point at 1.62%.
The dollar index was at 104.1 after falling 0.2% on Thursday while most Asian currencies gained on growing hopes that the U.S> Federal Reserve would cut rates twice this year.
Interest rate futures are pricing two rate cuts this year, with the first in September.
Investors will also closely watch the U.S. non-farm payrolls report, due later on Friday, for further cues on when the Fed is likely to begin easing policy rates.
Economists polled by Reuters expect that the U.S. economy added 185,000 jobs in May while the unemployment rate held steady at 3.9%.
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