Call rates ruled slightly higher in the 8 per cent to 8.35 per cent band on Tuesday. Call rates opened steady at 8.00-8.25 per cent, little changed from its weekend's close and hovered in a narrow range of 8.00-8.30 per cent throughout the day.

"Demand for funds was poor. Few banks were seen borrowing on account of March 31", a dealer with a US-based bank said. Most of the deals were struck in the region of 8.20-8.30 per cent. Overnight rates finally closed at 8.10-8.35 per cent. The Discount and Finance House of India (DFHI) extended market support to the extent of Rs 1,700 crore. Elsewhere, the National Stock Exchanges' overnight Mibid and Mibor were quoted at 8.06 per cent and 8.29 per cent with the 14-day ones at 9.06 per cent and 9.81 per cent.

FORECAST: Call rates seen in the 8.10-8.25 per cent range on Wednesday.

Spot Dollar

The rupee closed lower at 42.43/44 on Tuesday, but held firm for most of the day in the 42.42-42.44 band. "There was little trading interestwith fiscal-year end book adjustments. Corporate demand for dollars was poor and most of the trades were inter-bank. Whatever little demand for dollars was more than met by supplies," a dealer with a brokerage said. Cash/spot flared up to 6/6.75 paise from Friday's 2/2.5 paise with the next settlement day shifting to April 5 on account of the spate of holidays ahead.

Cash/tom went at 0.25/0.50 paise (1.75/2 paise) with tom/spot almost unchanged at 6/7 paise. The Reserve Bank of India pegged its reference rate for the dollar at 42.43 per us dollar against the previous fix of 42.40. Elsewhere, the Euro opened at 45.42 (46.06) against the rupee, went to a high of 45.64 (46.06) before closing at 45.39 (45.90).

FORECAST: Rupee seen at 42.41-42.43 levels on Wednesday.

Forward Premiums

Forwards softened across all maturities on Tuesday and the six-montly annualised forward cover closed at 6.76 per cent from last Friday's 7.05 per cent). "Premiums opened 5 to 6 paise lower in the morning, held firm toclose softer from Friday levels. There was a fair bit of receiving interest in the near terms up to August, and April and May were quite active", dealers said. April dollars were quoted at 15/16 paise (20/22 paise), May 38/40 paise (49/51 paise) with June at 74/76 paise (62/64 paise).

In the far terms, September dollars closed at 148/151 paise (137/139 paise), October at 175/177 paise (165/167 paise) with November at 202/206 paise ( 194/196 paise). "There was also a bit of import cancellations today", a dealer at British bank said.

FORECAST: Six-month annualised forward cover seen at 6.70-6.80 per cent levels on Wednesday.

Gilts

The government securities market witnessed dull trades with a few inclined to take fresh positions ahead of the fiscal year-end. There was mild selling pressure, which pushed down prices of short and medium sized papers. The 11.55 per cent 2001 paper went at Rs 100.75-Rs 100.84 lower from Friday's Rs 100.85-Rs 100.91 while the 11.68 per cent 2002 was dealt at Rs101.14-Rs 101.21 (Rs 101.20-Rs 101.26).

The 11.75 per cent 2006 paper was quoted at Rs 99.90-Rs 100.10, but dealers said that few trades could possibily been have struck in this security. The 364-day T-bill maturing on the 3 of March 2000 went at a yeild to maturity of 10 per cent.

FORECAST: Gilts prices seen holding more or less similar levels on Wednesday.