The overnight call money rates opened at 8.99-9 per cent on Tuesday, compared with the previous close of 8.25-8.50 per cent. The rates eased later and closed at 6.50 per cent. The call money market witnessed a fairly easy trend owing to ample liquidity in the system to meet borrowers' requirements, dealers said. The rates dipped to the central bank's repo floor levels towards the close.

The Reserve Bank of India announced a three-day fixed-rate repo in government of India dated securities to be held on May 20 for parties holding SGL and current account. Most deals were struck at 7-8 per cent, dealers said.The Discount and Finance House of India extended market support of over Rs 1,600 crore.

FORECAST: The call money rates are likely to open at 6-7 per cent on Wednesday.

Spot Dollar

The rupee gained against the dollar in the spot market on Tuesday. It opened almost unchanged from its previous close of 40.53. Poor corporate demand from corporates saw it strengthen soonthereafter to 39.50levels. "There was little demand for dollars... supplies were good," a dealer with a brokerage said.

The greenback's high for the day was 40.54 while its low was 40.49. Lacklustre demand saw the rupee close at the dollar's low. Most trades were conducted at around 40.54 levels, dealers said. The State Bank of India did not enter the market. On Monday, the State Bank and a few foreign banks had sold the greenback aggressively.

Elsewhere, the Reserve Bank of India pegged its reference rate for the dollar at 40.49 as against its previous fix of 40.45.

FORECAST: The rupee is seen in the 40.52-40.67 band on Wednesday.

Gilts

Fairly brisk activity was witnessed in the government securities market on Tuesday. The securities' prices rose by 30-40 paise across the board as there was a lot of buying pressure.

The government securities market has stabilised now as banks have started to take up positions, dealers said. "The easy state of the call money market also generated buyinginterest in the government securities market," dealerssaid.

The wholesale debt market of the National Stock Exchange witnessed trading worth Rs 514.57 crore. The 12 per cent government loan maturing in 2008 was traded for Rs 110 crore at a weighted yield of 12 per cent. The 11 per cent government loan maturing in 2002 was traded for Rs 50 crore at a weighted yield of 11.22 per cent.

FORECAST: The prices in the government securities market are likely to improve further by Wednesday.

Forward Premiums

The six-month annualised forward cover strengthened to 7.92 at the close of trades on Tuesday, compared with its previous close of 8.31 per cent.

Forward premiums gained across the board by 10-15 paise, dealers said. "Rumours of an impending cash reserve cut saw forwards gaining," a dealer with a British bank said.

May dollars ended at 2/3 paise, compared with their previous close of 6/7 paise, June at 24/26 paise (30/32 paise), July at 52/54 paise (60/62 paise), August at 80/82 paise (98/92paise) and September at 110/112 paise (120/123 paise).

In the long terms, February premiums closed at 255/260 paise (262/267 paise), March at 283/288 paise (292/298 paise) and April at 312/316 paise (322/329 paise). "There was a fair bit of receiving in January and February maturities," dealers said.

FORECAST: The six-month annualised cover is seen at 7.90-8 per cent levels on Wednesday.