The overnight call rates ruled steady between 8-8.10 per cent on Thursday. The call rates opened almost steady at 8-8.10 per cent against the previous close of 7.90-8.10 per cent. Due to tightness in liquidity and marginally high demand for funds, the rates hovered in the range of 7.80-8.10 per cent for most part of the day. Later, at the fag end of the session, the call rates closed at 8-8.10, unchanged from their opening levels.

The Reserve Bank of India on Thursday 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. The inflow through reverse repo into the system was to the tune of Rs 1,500 crore. The National Stock Exchange (NSE) overnight Mibid and Mibor were quoted at 8.04 per cent and 8.16 per cent respectively.

FORECAST: The call rates are seen between 7-80-8.20 per cent on Friday.

Spot Dollar

The rupee moved in a narrow four paise range between 42.51/54 againstdollar. The Indian currency opened at 42.51/52 against the greenback as against the previous opening level of 42.50/51 against dollar.

"During the day, owing to high demand for funds, the Indian currency depreciated by four paise," forex dealers said. According to dealers, demand for dollars was witnessed in the interbank market. The supply however was marginally lower.

The Indian currency finally closed at the opening value of 42.51/52 against dollar compared with their previous close of 42.49/50. According to forex dealers, the Indian currency is expected to depreciate further during the week. The RBI reference rate for US dollar was pegged at 42.43 as against Rs 42.45. Meanwhile, the Indian currency opened at 46.19 against dollar, recorded a high of 46.26 to finally close lower at 46.06 against euro.

FORECAST: The rupee is expected to rule between 42.48/56 against dollar on Friday.

Forward Premiums

Far-end forward premiums firmed up by 3-4 paise on Thursday after the Indian currencydepreciated by 4 paise during the day. "Lot of paying interest was seen in the market by corporates," dealers said.

According to dealers, corporates were covering in far-forwards as they expect the rupee to depreciate further. The six-month annualised premium was quoted at 7.15 per cent, three months at 6.6 per cent and one month at 7 per cent. March premiums closed at 17-18 paise (15-17 paise), April at 44-46 paise (41-44 paise), May at 67-69 paise (63-66 paise), June at 95-97 paise, July at 121-123 paise, August at 148-150 paise (142/145 paise), September at 174-177 paise (171/173 paise), October and November at 203-205 paise, December at 259-261 paise and January at 287-289 paise.

FORECAST: Six-month annualised forward seen in a band of 6.90-7.5 per cent on Friday.

Gilts

The wholesale debt market of National Stock Exchange recorded trades worth Rs 789.20 crore on Thursday as against the previous peg of Rs 1,316.58 crore. According to dealers, a lot of buying and selling was seen inshort and medium term papers.

Gilts prices moved in a 5-10 paise band during the day. The 11.40 per cent 2000 paper was quoted at Rs 100.76, 11.55 per cent 2001 paper at Rs 100.80, 12.50 per cent 2004 paper at Rs 103.25, 13.40 per cent 1999 paper at Rs 102.55, 11.15 per cent 2002 paper at Rs 99.58. The 12.5 per cent government stock was traded worth Rs 90 crore at a weighted yield of 11.63 per cent. The 10.50 per cent tax-free bonds of Konkan Railway Corporation maturing in 1999 were traded worth Rs 15 crore at a yield of 8.44 per cent.

FORECAST: Gilts prices are expected to firm up on Friday.