Call money rates eased to an intra-day low of 8.80 per cent on Tuesday owing to lacklustre demand for funds. The overnight call rates opened at 9 per cent, slightly easier compared with their previous opening level of 9.30-9.40 per cent. Throughout the day, owing to lack of demand for funds, the rates eased to an intra-day low of 8.80 per cent.

The rates finally closed at 8.80 per cent as against the previous close of 8.90-9 per cent. The central bank also mopped up Rs 500-crore through its three-day fixed rate repo in government of India dated securities for parties holding SGL and current account as against the previous mopup of Rs 1,000 crore at 8 per cent. However, there was no inflow into the system on Tuesday. Market dealers are of the view that the overnight rates will ease during the fortnight as some inflow is expected to come into the system through coupon payments on a few securities.

FORECAST: Call rates are expected to rule between 8.80-9.20 per cent onWednesday.

Spot Dollar

The rupee weakened by six paise on Tuesday to an intra-day high of 42.44/45 against dollar as against the previous low of 42.40/41 owing to buying interest by bank on behalf of corporates.

The Indian currency opened at 42.435/445 against dollar compared with the previous close of 42.39/40 against dollar. Due to slightly higher demand at noon, the dollar weakened further by two paise to 42.44/45 against dollar. It finally closed at these levels. The RBI reference rate for US dollar was Rs 42.44, four paise up from its previous peg of Rs 42.40. Cash spot closed at a high 4-4.50 paise as against the previous level of 1.25-1.50 paise and cash tom at 0.50-0.75 paise. Mwanwhile, euro was quoted at an all-time low of 1.10 against dollar. The Indian currency opened at 46.62 against dollar, recorded a high of 47.02 to finally close lower at 46.63 against euro.

FORECAST: Rupee seen between 42.38 and 42.48 on Wednesday.

Forward Premia

Forward premiums across allmaturities firmed up by 1-2 paise during the day owing to paying interest by corporates. According to dealers, marginally high-paying interest was seen by corporates in 1-3 months forwards.

The six month premium closed at 7.2 (7.21 per cent), three months at 6.9 per cent (7.1 per cent) and one month at 6.2 per cent. The March premium closed at 21-24 paise (24-26 paise), April at 50-52 paise (54-56 paise), May at 72-75 paise (76-78 paise), June at 100-102 paise (103-105 paise), July at 125-127 paise (127-131 paise), August at 151-154 paise (155-158 paise), September at 179-182 paise (183-186 paise), October at 208-211 paise (210-215 paise), November at 237-240 paise (239-241 paise), December at 267-270 paise (269-273 paise) and January at 296-299 paise.

FORECAST: Six-month annualised premium seen between 6.9-7.4 per cent levels on Wednesday.