Market consensus had largely anticipated that India's central bank would keep its benchmark interest rate unchanged at Friday's monetary policy meeting, but the bank may instead opt for a surprise rate hike.

A media survey of economists found a majority predicting the Reserve Bank of India would hold the key rate steady at 5.25%, while signaling that a rate increase would likely not occur until around the end of the year.

A minority of economists, however, believe that to stabilize the Indian rupee, which has repeatedly hit record lows against the U.S. dollar, the central bank could implement a rate hike at this week's policy meeting.

In the lead-up to the Reserve Bank of India's decision, the media surveyed nine economists over the past week.

Venugopal Garre, Managing Director and Head of India Research at Bernstein, stated during a television appearance on Tuesday that a contrarian move by the RBI to raise rates would be more logical.

He added that a rate hike would align with recent global interest rate trends and help curb capital outflows, with the persistent depreciation of the local currency currently being the foremost challenge for Indian policymakers.

Several economies in India's region have already moved preemptively to raise rates to combat inflation, with some implementing increases that exceeded market expectations.

Indonesia, which shares India's struggle with a weakening currency, saw its central bank unexpectedly raise rates by 50 basis points on May 20. The Central Bank of Sri Lanka hiked rates by 100 basis points on May 26, marking its largest single increase in four years.

Pressured by a rising import bill and continuous capital outflows, the rupee has weakened, prompting even Prime Minister Narendra Modi to call for citizens to conserve foreign exchange.

Media reports indicate that Indian regulators have implemented several measures to defend the beleaguered rupee, including directing state-owned banks to sell dollars to curb a sharp decline and the government raising import duties on gold to dampen demand and preserve foreign exchange reserves.

Although the rupee has rebounded slightly from its record lows, approaching the key psychological level of 100 per U.S. dollar, it remains one of the most fundamentally vulnerable currencies in Asia.