Call rates softened to close at 1 to 2 per cent on account of Reporting Friday. Opening the day at 6.75-6.80 per cent, down from its Wednesday's close at 7.25-7.50 per cent thereabouts, call rates softened to 1-2 per cent by close of trades. "In early trades, quite a few like State Bank of India and primary dealers were seen lending overnight money", dealers said.

Three-day money was dealt between 7.25 per cent and 8 per cent. The Reserve Bank, meanwhile, has announced a three-day 6 per cent fixed-rate repos on Saturday. The National Stock Exchange's overnight Mibid and Mibor were pegged at 6.63 per cent (7.38 per cent) and 7.06 per cent (7.64 per cent) respectively with that for 14-day maturity at 8.96 per cent (8.66 per cent) and 9.78 per cent (9.39 per cent).

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

Spot Dollar

The rupee continued to hold firm against the dollar on Friday. Opening the day unchanged at 42.40/41 from its Wednesday'sclose, the rupee held the same level throughout the day. "Corporate demand for dollars is poor. The rupee would have gained to 42.37/38 levels had the State Bank of India not bought dollar", a dealer at a European bank said.

The State Bank put a quote for the dollar at 42.4050, and quite a few foreign banks sold dollars. At close, the rupee was seen at 42.4050. Cash/spot was dealt at 2/2.5 paise (2.25/2.75 paise) with cash/tom at 1.75/2 paise (0.75/1 paise). The Reserve Bank maintained its reference rate at 42.40. The Euro opened at 46.06 (46.09) against the rupee, which was also its intra-day high before closing at 45.90.

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

Forward Premium

Forward premiums rose in early morning trades on slight paying pressure before closing 2 to 3 paise over their Wednesday's closing level. The six-month annualised forward closed at 7.05 per cent (7.10 per cent). "Quite a few corporates were seen paying in the morning on account of the holidays ahead.Quite a few import contracts were also extended", a dealer at a brokerage said, while adding: "In later day trades, State Bank and a few state-run banks were seen receiving small amounts. Further, call rates were also low at 1 to 3 per cent levels", In the near terms, May premiums closed at at 49/51 paise (49/51 paise) with June at 74/76 paise (75/77 paise). In the far forwards, September dollars finished at 148/151 paise (150/152 paise), October at 175/177 paise (176/178 paise) with November at 202/206 paise (205/207 paise).

FORECAST: Six-month annualised forward seen at 6.90 per cent levels on Tuesday.

Gilts

Gilts prices held more or less firm on Friday. The 12.70 per cent 2001 was dealt almost unchanged at Rs 102.70-102.80 (Rs 102.75-102.80) as also the 11.68 per cent 2002 at Rs 101.20-101.26 (Rs 101.20-101.25). "Trades continue to be lacklustre with fiscal year end just days away. Holidays ahead has also sobered the mood," a dealer at a US-based bank said.

A fair bit of interest wasseen in the 11.55 per cent 2001 paper, which was quoted 2 to 3 paise lower at Rs 100.85-100.91 (Rs 100.88-100.93). Trades were also seen in 11.75 per cent 2006 paper between Rs 99.90-100.10 at a yeild to maturity of 11.77 per cent. The 364-day T-bill maturing on the March 10, 2000 was dealt at a YTM of 10.22 per cent (10.10 per cent).

FORECAST: Short-term bond prices seen dipping a bit on Saturday.