Call rates softened to close in the 7.25-7.50 per cent band on Wednesday. Opening the day at 7.50-7.75 per cent levels, fairly close to its overnight close and ruled in the same range for most of the day. "Foreign and private owned banks were seen borrowing funds ahead of Reporting Friday. Most state-run banks though seem to have covered for their cash reserve ratio requirements. Majority of the deals were struck between 7.50 per cent and 7.60 per cent," a money dealer said.

Call rates eased in later day trades, and at close, they were seen at 7.25-7.50 per cent. No application was received at the Reserve Bank of India's three-day 6 per cent fixed rate repos held today. Elsewhere, the National Stock Exchange's overnight Mibid and Mibor was pegged at 7.38 per cent and 7.64 per cent with that for 14-day maturity at 8.66 per cent and 9.39 per cent.

FORECAST: Call rates seen hovering at 7.50-7.70 per cent levels on Friday.

Spot Dollar

The rupee continued to hold firm against thedollar on Wednesday. Opening the day at 42.40/41, little changed from its overnight close, the rupee held the same level throughout the day. "Interest for dollars was poor. Most corporates have bought dollars ahead of the holiday on Thursday, and also covered their fiscal-end requirements. Weak month-end demand made the dollar hover at a very normal range of 42.40/4050 till mid-session", a dealer with a European bank said.

At close of trades, the rupee was seen at Rs 42.40/41. Cash/spot went at 2.25/2.75 paise (1/1.5 paise) with cash/tom at 0.75/1 paise (0.25/0.50 paise). The Reserve Bank maintained its reference rate for 42.40 as against the previous fix of 42.39. The Euro opened stronger at 46.09 (46.20) against the rupee, went to an intra-day high of 46.42 (46.10) before closing at 46.36 (46.20).

FORECAST: Rupee seen in the 42.38-42.40 band on Friday.

Forward Premium

Forward premiums went slighly higher on Wednesday on paying interest. The six-month annualised forward cover closed at 7.10per cent as against Tuesday's 6.75 per cent. "A few corporates were seen paying. Towards close of trades, however, premiums came lower by 2 to 3 paise from their opening levels", a dealer at a brokerage said. In the near terms, May premiums closed at at 49/51 paise (49/50 paise) with June at 75/77 paise (73/75 paise) while in the far forwards, September dollar finished at 150/152 paise (146/148 paise), October at 176/178 paise (173/175 paise) with November at 205/207 paise (202/204 paise).

FORECAST: Six-month annualised forward seen at 6.65-6.90 per cent levels on Friday.Gilts

Gilts prices showed a steady to downwards trend on Thursday. The 12.70 per cent 2001 held firm at Rs at Rs 102.75-102.80 as also the 10.85 per cent 2001 at Rs 99.54 and Rs 99.59. Prices were softer by 2 to 3 paise on the 11.55 per cent 2001 paper at Rs 100.88-100.93 and the 11.68 per cent 2002 at Rs 101.20-101.25. "Most of the banks are not too keen to take on positions in the last fortnight of the fiscal. Bond prices did notmove much despite lower call rates", a dealer at a UK-based bank said. The 364-day T-bill maturing on the March 10, 2000 was dealt at a YTM of 10.10 per cent (10.32 per cent). "Trades were poor. Interest is largely restricted to a few short term papers and shortly maturing T-bills", a bond dealer at a European bank said.

FORECAST: Bond prices seen holding current levels on Friday.