Overnight rates went to an intra-day high of 11 per cent on Thursday. Opening the day at 9-9.50 per cent levels from its last close at 8.75-9 per cent, call rates went to over 10 per cent levels in early trades itself. "Call rates tightened to 11 per cent in later day trades on account of outflows of nearly Rs 3,500 crore as a result of the Reserve Bank's open market operations during the week", dealers said. In early trades, lenders were seen keeping off before inflows came in enabling call rates to soften to 9.50 per cent thereabouts. However, demand for funds ahead of Reporting Friday put pressure on call rates, which closed nearer to its day's high at 10.50-11 per cent. "High call rates today is just an abberation, and will correct itself once the cash reserve ratio reduction to 10 per cent from 10.5 per cent takes effect from May 8", a dealer at a European bank said. The NSE's overnight Mibid and Mibor were pegged at 9.74 per cent and 10.18 per cent.

FORECAST: Call rates seenat 8.30 per cent levels on Friday.

Spot dollar

The rupee ruled firm against the dollar on Thursday in dull trades. Opening the day at 42.72/74 almost unchanged from its last close at 42.73/74, the rupee hovered in a 5 paise band throughout the day. "Supplies are poor, but there is also no great demand for dollars. Political uncertainity has been discounted. Foreign institutional purchases on the bourses will help the rupee hold firm against the dollar", a dealer with a brokerage said. At close, the rupee was quoted at 42.72/74. Cash/spot went at 2.50/3 paise (1/1.25 paise) with cash/tom at 0.25/0.50 paise (0.25/0.50 paise) with tom/spot at 2.25/2.75 paise (0.50/0.75 paise). The Reserve Bank of India maintained its reference rate for the dollar at 42.73. In the cross-currencies, the rupee opened at 45.85 (45.36) against the euro, went to an intra-day high of 46.25 (45.60) before closing at 46.07 (45.33)

FORECAST: Rupee seen at 42.73/75 levels on Friday.

Forward premiums

Forwardpremiums softened on Thursday with a firm spot rupee. The six-month annualised forward cover continued to hold firm at 6.05 per cent. "There is hardly any paying or receiving interest. Trades are mostly inter-bank", a dealer with a brokerage said. April premiums closed at 9/11 paise (12/13 paise), June at 29/31 paise (31/33 paise) with July unchanged at 50/51 paise (51/53 paise). "Interest for forward dollars is almost absent. Despite call rates ruling firm for most of the week, premiums have not flared up", dealers said. In the far terms, December dollar was quoted at 170/173 paise (174/177 paise), January at 199/202 paise (203/205 paise) and February at 229/230 paise (231/233 paise).

FORECAST: Six-month annualised forward cover seen at 6.05 per cent levels on Thursday.

Gilts

Securities prices fell in early trades as call rates went to its day's high of 11 per cent, but recovered by close. The 12.50 per cent 2004 paper which went at Rs 104.52-104.55 on Wednesday fell to Rs 104.47-104.49in initial trades, but closed higher at Rs 104.51-104.52. The 11.55 per cent 2001 quoted marginally higher Rs 101.32-101.34 (Rs 101.28-101.31) while the 11.40 per cent 2000 paper went a shade lower at Rs 100.88-100.91 (Rs 100.93-100.94). Interest was also seen in the 10.85 per cent 2001 at Rs 99.93 levels. The The 11.98 per cent 2004 paper quoted unchanged at Rs 102.60-102.61 levels. Likewise the 11.68 per cent 2006 at Rs 100.52-100.55 and the 11.64 per cent 2000 at Rs 101.09-101.11. In the T-bills segment, the 91-day T-bill maturing on the June 26 this year was quoted a yeild-to-maturity of 8.45 per cent.

FORECAST: Short-term bond prices seen recovering on Reporting Friday's lower call rates.