The rupee ruled firm against the dollar in listless trading on Wednesday. The Indian currency opened at 42.50/51, unchanged from its previous close, and traded in a fine 2 paise band throughout the day. "There was little corporate demand for dollars," dealers said. Corporate dollar sales saw the rupee briefly quote at an intra-day high of 42.49/50 where it closed.

Cash/spot quoted at 1/1.50 paise and cash/tom at 0.50/1 paise. Elsewhere, the Reserve Bank of India fixed its reference rate for the dollar at Rs 42.49 compared with its Monday's peg of Rs 42.51.

Trading was next to nothing in the euro too. The common currency opened at 49.05 against the rupee (49.19), quoted at an intra-day low of 48.88 and closed weaker at 49.93.

FORECAST: The rupee is seen at 42.48-42.53 on Thursday.

FORWARD PREMIUMS

Premiums eased a bit on Wednesday with little corporate interest in forward dollars. "Two-way trading was seen in February, March and April maturities," a dealerwith a European bank said. April dollars opened at 72/73 paise and firmed up to 75/76 paise on paying pressure before closing at 73/75 levels. "Interest was largely in the near terms," a dealer with a brokerage said. Six-month annualised forward cover softened to 6.95 per cent from its Monday's quote of 7 per cent. February premiums closed at 18-20 paise (19-24 paise), March at 43-45 paise (44-48 paise), April at 73-75 paise (73-77 paise), May at 93-96 paise (95-98 paise), June at 118-121 paise (120-124 paise), July at 147-150 paise (149-153 paise) and August at 175-178 paise (179-182 paise).

FORECAST: Six-month annualised cover is seen at 6.90-7 per cent on Thursday.

CALL MONEY

A more or less steady trend prevailed in the call money market on Wednesday owing to a scaled-down demand for funds ahead of the reporting Friday on January 29. Most banks had covered their positions in the first week of the fortnight. Call rates opened at 8.25-8.40 per cent and closed at 8.20-8.30 per cent,little changed from Monday's closing levels of 8.10-8.25. Most transactions were done at 8.15-8.25 per cent, dealers said. Most banks had borrowed for their reserve requirements last week with the result that there was limited demand. Moreover, there was adequate liquidity in the system, they added. In moderate activity, dealers said the market ended on a squarish note.

FORECAST: Call rates are seen easy on Thursday.

GILTS:

The secondary market for government securities witnessed demand for short- and medium-term papers on Wednesday. Mild buying initially pushed up prices, but light profit-taking later pared gains of short-dated securities. The longer maturities were generally sidelined. The wholesale debt market of the National Stock Exchange witnessed trades worth Rs 531.09 crore. 11.75 per cent 2001 converted government stock traded worth Rs 85 crore at a weighted yield of 11.42 per cent. 11.55 per cent 2001 government loan traded worth Rs 75 crore at a weighted yield of 11.43 percent. 11.64 per cent 2000 government loan traded worth Rs 65 crore at a weighted yield of 11.18 per cent while 11.78 per cent 2003 government loan traded worth Rs 35 crore at a weighted yield of 11.72 per cent.

FORECAST: Demand for medium- and short-dated gilts is seen continuing on Thursday.