Rupee inches higher: The rupee experienced a slight increase on Monday due to dollar inflows; however, the demand for the greenback from importers, particularly local oil companies, towards the end of the month, was anticipated to cap potential gains, according to traders.

As of 10:20 am, the rupee stood at 82.9025 against the US dollar, reflecting a 0.04 per cent rise from its previous session's close at 82.9375.

Despite the dollar index hovering around 104 and most Asian currencies weakening, the Indonesian rupiah declined by 0.2 per cent, leading the losses in the region.

While continuous inflows in the bond market were expected to support the rupee, traders cautioned against expecting major appreciation amid month-end demand from importers. 

Notably, oil companies were observed bidding for dollars during early Monday trading.

Moreover, dollar-rupee forward premiums experienced a slight recovery, with the one-year implied yield up 2 bps at 1.74 per cent, after reaching its lowest level since December on Friday.

Dilip Parmar, a foreign exchange research analyst at HDFC Securities, suggested that while the bias may favor rupee bulls, local dollar demand could keep the rupee rangebound between 82.75 and 83.10 in the near term.

Investor attention remained focused on a series of remarks from US central bank officials scheduled to speak during the week, as well as the core personal consumption expenditures (PCE) price index, which is the Federal Reserve's preferred measure of inflation.

New York Fed President John Williams hinted in an interview with Axios published on Friday that it might be appropriate to ease restrictive monetary policies later this year.

Investors are currently pricing in a 20 per cent chance of a Fed rate cut in May, a notable decline from nearly 90 per cent estimated a month earlier, according to CME's FedWatch tool.

(With Reuters Inputs)