The overnight call money interest rates eased to an intra-day low of 8.80 per cent on Friday. The call rates opened at 8.90-9 per cent slightly higher compared to its previous close of 8.80-8.90 per cent. Throughout the day, the rates ruled between 8.80-9 per cent level owing to lacklustre demand for funds.

"Due to the forthcoming budget most banks have adopted a wait- and watch-approach and are not taking up any new positions," dealers said.

Towards the close, the rates eased to settle at 8.70-8.90 per cent. According to money market dealers, the liquidity in the system is not very comfortable as there is no repo outstanding. The RBI did not receive any application for a three-day fixed rate repo in government of India dated securities for parties holding SGL and current account. Nothing came into the system on Friday through the RBI fixed rate repo. Call rates are expected to ease next week as Rs 2,000 crore is expected to come through redemption of 13.65 per cent 1999 paper.

FORECAST: The call rates are expected to rule between 8.50-9 per cent on Saturday.

Spot Dollar

The rupee ruled steady against the dollar on a quiet ranged market on Friday. The currency opened at Rs 42.46/4650 as compared with its previous close of 42.465/475 against the greenback. Throughout the day, the rates ruled in a 3 paise band between 42.46/48 against the dollar. The rates finally closed at 42.46/47. According to forex dealers, the rupee is expected to rule between 42.42/50 against the dollar.

"Moderate activities were seen in the forex market as the demand for dollars was met by sufficient supply," dealers said. The Reserve Bank of India reference rate for US dollar was 42.47 as against the previous peg of 42.46. The rupee opened at 48.10 against euro, went to a high of 48.28 to finally close lower at 47.92.

FORECAST: The rupee is expected to rule at 42.40/50 on Saturday.

Forward Premiums

Forward premiums across all maturities eased marginally by 1-4 paise compared with their previous closing level in the absence of paying pressure and moderate receivings on Friday. Near forwards came down by 1-2 paise, while far forwards were lower by 2-4 paise.

The sixth-month annualised premium closed at 6.7 per cent, three months at 6.21 per cent and one-month at 5.35 per cent. The February premium closed at 11-12 paise (12-13 paise), March at 32-34 paise (34-37 paise), April at 60-62 paise (62-64 paise), May at 81-83 paise (84-86 paise), June at 107-109 paise (110-112 paise), July at 132-135 paise (135-137 paise), August at 157-160 paise (162-164 paise), September at 187-190 paise (188-192 paise), October 211-215 paise (214-217 paise), November at 239-244 paise (243-246 paise), December at 270-273 paise (272-275 paise) and January 295-297 paise (297-302).

FORECAST: The six-month annualised premiums is expected to rule between 6.2-6.8 per cent on Saturday.

Gilts

The short- and medium-term gilts prices firmed up 2-3 paise on Friday owing to buying interest in gilts. "Easing call rates eased the gilts prices as the gilts market witnessed a lot of buying pressure," dealers said.

According to dealers, gilts prices are further expected to firm up as about Rs 2,000 crore is expected into the system on Saturday due to redemption of 13.65 per cent 1999 paper. The 11.40 per cent 2000 paper was traded at Rs 100.30 (Rs 100.28), 11.55 per cent 2001 paper at Rs 100.29, 12 per cent 2004 paper at Rs 102.36, zero coupon 2000 paper maturing on July 13 at Rs 85.67, 11.64 per cent 2000 paper at Rs 100.72 and 91-day T-bills maturing on May 1 at 9.34 per cent.

The wholesale debt market segment of the National Stock Exchange securities worth Rs 447.83 crore as against the previous level of Rs 485.65 crore. The 11.40 per cent government loan maturing in 2000 was traded worth Rs 55 crore at a weighted yield of 11.21 per cent.

FORECAST: Gilts prices are expected to firm up by 1-2 paise on Saturday.