Call rates ruled in the 8.10-8.20 band for most of Tuesday. Opening the day at 8.25-8.35 per cent higher from its last close at 8.05-8.10 per cent, call rates hovered in the 8.10-8.25 per cent band for most of the day. "Demand for funds was quite high ahead of the Reporting Friday in early trades...there was last minute demand to cover caqsh reserve ratio requirements, and this put some pressure on funds and pushed up call rates. There was, however, adequate liquidity in the system to meet the needs of borrowing banks", dealer said. Call rates eased to an intra-day low of 8.10 per cent before closing at 8.10-8.15 per cent. Most of the transactions got done in the region of 8.20-8.30 per cent band.

FORECAST: Call rates seen at 8-8.10 per cent levels on Tuesday.

Spot dollar

The rupee continued to rule firm against the dollar on Tuesday. Opening the day at 42.75/76, almost unchanged from its last close at 42.76/77, the rupee ruled in narrow 2 paise band throughout theday. "Corporate interest for dollars is poor. There is hardly any trading activity", a dealer at a European banks said. Cash/spot went at 0.50/0.75 paise (0.75/1 paise) with cash/tom and tom/spot unchanged at 0.25/0.50 paise. The Reserve Bank of India fixed its reference rate for the dollar 42.75 as against its previous fix at 42.78 on Monday. The rupee opened at 45.05 (45.23) against the Euro, went to an intra-day high of 45.31 (45.33) before closing at 45.11 (45.27)

FORECAST: Rupee seen at 42.75 levels on Tuesday.

Forward premiums

Forward dollar premiums softened across all maturities on Tuesday in line with a rocksteady spot rupee, and poor interest for forward dollars. The six-month yearly annualised forward cover closed at 6.05 per cent (6.2 per cent) with the one-year annualised forward cover going at 6.60 per cent (6.79 per cent). "Forward premiums eased slightly on good receiving. May, June and July maturities were fairly active, and the State Bank of India was seen receiving smallamounts", a dealer at a US-based bank said. May dollars finished at 11/13 paise (12/14 paise), June at 30/33 paise (32/34 paise) with July at 51/53 paise (53/55 paise). In the far terms, December was quoted at 173/176 paise (178/181 paise), January at 210/204 paise (205/209 paise) and February at 228/231 paise (231/234 paise).

FORECAST: The six-month annualised forward cover seen at 6.20-6.25 per cent levels on Tuesday.

Gilts

Bond prices held more or less steady on Tuesday after opening slightly lower on account of tight call rates. The 11.98 per cent 2004 was seen quoted between Rs 102.50-102.54 in early trades, but recovered to Rs 102.57-102.58 levels in later trades. "The secondary market for securites remained subdued and prices were more or less steady in a narrow band. Bond prices fell in early trades with a firming up of call rates, but as call rates eased, bond prices went slightly higher", a dealer at a European bank said. The 11.68 per cent 2006 went between Rs 100.43-100.48 (Rs100.52-100.54). The 11.55 per cent 2001 quoted between Rs 101.30 and Rs 101.31 with the 11.40 per cent 2000 paper between Rs 100.92 and Rs 100.95.

FORECAST: Bond prices seen holding current levels on Tuesday.