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The Indian rupee slipped to its weakest closing level on Monday, pressured by a decline in its Asian peers while likely intervention by the Reserve Bank of India ensured the currency did not weaken more.

The rupee closed at 83.9725 against the U.S. dollar, after closing at 83.9550 in the previous session. The currency hovered in a narrow range between 83.95 and 83.97 during the session.

The RBI likely sold dollars to limit further depreciation in the currency, traders said.

Most Asian currencies fell 0.1% to 0.8% while the dollar index edged lower to 103.1.

Traders expect the rupee to be rangebound ahead of the release of closely-watched U.S. consumer inflation data on Wednesday, which is expected to shape expectations of when the Federal Reserve may begin to ease policy rates.

Interest rate futures are currently pricing in about 100 basis points (bps) worth of rate cuts over 2024, starting in September.

"Given a still resilient U.S. economy... and ongoing uncertainty over the upcoming U.S. elections in November, there could still be further repricing of rate-cut expectations," MUFG Bank said in a note.

Dollar-rupee forward premiums slipped, with the 1-year implied yield down 2 basis points at 2.02%.

While far forward premiums should move higher over the medium term, it would be better to wait for a dip towards 1.95% to initiate a fresh paid position, a foreign exchange trader at a private bank said.

India will report its consumer inflation data post market hours on Monday. The print is expected to have eased to 3.65% in July, according to economists polled by Reuters.