Call rates moved in a narrow range on Friday. Overnight rates opened at 9.35-9.40 per cent compared with their previous close of 9.10-9.20 per cent. Call rates moved in a thin band of 9.35-9.40 per cent throughout the morning.

The rates finally eased to 9.25 per cent towards the close owing to absence of traditional lenders in the market. "Liquidity is tight which is keeping call rates firm between 9.25 per cent and 9.50 per cent," dealers said.

The total outstanding in repos is around Rs 1,500 crore. The inflow into the system was Rs 28 crore whereas the outflow was only Rs 13 crore. The NSE's Mibid and Mibor quoted at 9.20 per cent and 9.36 per cent, respectively.

FORECAST: Call rates are seen at 9.25-9.50 per cent on Monday.

Spot Dollar

The rupee remained rangebound on Friday as it moved in a narrow 5 paise band against the dollar. The Indian currency opened at 42.30/31, unchanged from its previousclose.

The rupee remained stable at 42.30-31 in the morning owing to lack of demand. Later, it strengthened slightly to an intra-day low of 42.28/29.

According to forex dealers, when the rupee was hovering at 42.28-29, State Bank of India entered the market to halt rupee from appreciating further by buying dollars which saw the unit weaken to 42.31/32. The rupee finally closed at 42.31/32, 1 paise weaker than its opening level of 32.30/31.

FORECAST: The rupee is seen between 42.28 and 42.38 on Monday.

Forward Premiums

Forward premiums across all maturities remained stable on Friday. Near-term premiums softened by 1 paise and far-end ones by 2-3 paise owing to slight receiving by exporters in a thin market.

The six-month annualised premium quoted at 7.72 per cent, three months at 6.38 per cent and one month at 6.25 per cent. October premiums closed at 3-7 paise (4-7 paise), November at 23-27 paise (24-27 paise), December at 46-50 paise (47-51 paise), January at 74-77 paise (75-78paise), February at 104-108 paise (105-109 paise), March at 137-141 paise (138-142 paise), April at 169-174 paise (170-175 paise), May at 203-207 paise (204-208 paise), June at 236-240 paise (237-241 paise), July at 268-273 paise (269-274 paise), August at 300-305 paise (301-306 paise) and September at 334-337 paise (335-338 paise).

FORECAST: The six-month annualised premium is seen at 7.7-7.8 per cent on Monday.

Gilts

The government securities market remained lacklustre on Friday. According to dealers, little interest was seen in short-dated gilts maturing in 1999 and 2000. "Due to uncertain interest-rate movement, players are not taking positions which is keeping the gilts market stable at the existing levels," dealers said.

The zero coupon 1999 paper traded at Rs 97.42 and the 11.40 per cent 2000 paper at Rs 99.92. The wholesale debt market of the NSE witnessed trades worth Rs 195.66 crore (206.02 crore). The zero coupon 1999 bond traded worth Rs 45 crore at a weighted yield of 10.24per cent.

The 13.70 per cent government bond maturing in 1999 traded worth Rs 35 crore at a weighted yield of 10.74 per cent. The commercial paper of Grasim maturing on January 11, 1999, traded worth Rs 10 crore at a yield of 11.25 per cent.

FORECAST: Short-term gilt prices are expected to remain stable at Friday's level on Monday.