The Indian rupee inched higher on Monday amid muted early trading, with most Asian markets closed, and as traders await fresh cues from the release of inflation data in India and the United States.

The rupee was at 82.9925 against the U.S. dollar as of 09:45 a.m., slightly stronger than its previous close at 83.0350.

The dollar index was steady near 104, while the offshore Chinese yuan weakened nearly 0.1% to 7.2239. Most Asian markets, including Japan and China, were shut on Monday on account of local holidays.

The rupee is likely to stay in its 10-paisa corridor on either side of the 83-handle during the day, a foreign exchange trader at a private bank said.

Trading volumes were also muted early in the session, the trader added.

The focus remains on when the U.S. Federal Reserve may begin easing policy rates, with Tuesday's inflation data likely to shape expectations around the timing of the first cut.

Investors are currently pricing in a 37.5% chance that the Fed will keep rates unchanged in May, up from about 27% as of February 2.

Meanwhile, India will report consumer price inflation data later in the day which is expected to show that retail inflation eased to a three-month low of 5.09% in January, according to economists polled by Reuters.

While fundamentals are supportive of the rupee, meaningful appreciation is likely only "once it successfully maintains levels above 82.80", Amit Pabari, managing director at FX advisory firm CR Forex said.

Remarks from U.S. Fed policymakers will also be key to watch later in the day as they could provide insight into how officials are thinking about the future trajectory of policy rates. (Reporting by Jaspreet Kalra; Editing by Sohini Goswami)