Call Money
Overnight rates continued to rule high on Reporting Friday. Call rates opened the day at 9.50-9.75 per cent, lower from their last close of 10.50-11 per cent, and went to an intra-day high of 11 per cent on good demand for funds from a few private-owned and foreign banks. "A few banks have been caught napping with regard to their cash reserve ratio (CRR) positions", dealers said, adding that the RBI's decision to re-issue the 11.19 per cent 2005 and 12.32 per cent 2011 bonds for Rs 5,000 crore could well keep call rates firm in the new fortnight. Dealers were of the view that the CRR cut effective tomorrow to 10 per cent from 10.5 per cent would bring in the much needed respite in the overnight markets.Mostdeals for overnight funds were struck between 9.0 and 9.5 per cent. At close, call rates were seen at 8.20-8.50 per cent. The Reserve Bank of India's four-day 6 per cent repos did not get any response with call rates ruling high.FORECAST: Call rates seen at 9 per cent levelson Saturday.
Spot Rupee
The rupee held firm against the dollar on Friday in dull and listless trades. Opening the day at 42.73/74, almost unchanged from its last close, there was hardly any movement in the local currency with poor corporate interest for dollars. "Demand for dollars is weak ahead of the weekend. Most expect the rupee to hold at current levels over the new week", a dealer with a brokerage said.
At close, the rupee was seen at 42.73/74. Cash/spot went unchanged at 2.50/3 paise with cash/tom at 2/2.50 paise (0.25/0.50 paise) and tom/spot at 0.25/0.50 paise (2.25/2.75 paise). The Reserve Bank of India fixed its reference rate for the dollar at 42.75 as against its last fix at 42.73. The rupee opened at 46.11 (45.85) against the euro, went to an intra-day high of 46.20 (46.25) before closing at 46.07 (46.07)
FORECAST: Rupee seen at 42.73/75 levels on Monday.
Forward premiums
Forward premiums remained largely unmoved on Friday. The six-month annualised forwardcover was seen holding its overnight levels of 6.05 per cent. There was reportedly some paying interest in the near forwards, but on the whole interest for forward dollars was poor. "A few corporates with an exposure feel that the spot rupee will hold firm in the near term", dealers said.
In the near terms, April premiums closed at 10/11 paise (9/11 paise), June at 30/31 paise (29/31 paise) with July unchanged at 50/51 paise). "Premiums are expected to hold their current levels as long as call rates continue to hold tight", dealer with a brokerage said. In the far terms, December dollars were quoted at 169/171 paise (170/173 paise), January at 198/201 paise (199/202 paise) and February at 224/227 paise (229/230 paise).
FORECAST: Six-month annualised forward cover seen at 5.96 per cent on Monday.
Gilts
Bond prices were on a slight see-saw on Friday. The 12.50 per cent 2004 and the long-dated 11.99 per cent 2009 saw active trades. The 12.50 per cent 2001 paper was dealt at Rs104.44-104.48, down from its last finish at Rs 104.51-104.52 levels while the 11.99 per cent 2009 was marginally higher at Rs 100.68-100.71 thereabouts. The 11.55 per cent 2001 was seen quoted at Rs 101.25-101.30 (Rs 101.32-101.34) while the 11.40 per cent 2000 paper went higher at Rs 100.92-100.94 (Rs 100.88-100.91). The 10.85 per cent 2001 was traded higher at Rs 99.95-100.00 levels (Rs 99.93-99.94) as also the 11.98 per cent 2004 paper quoted at Rs 102.65-102.68 (Rs 102.60-102.61). Prices also firmed up on the 11.68 per cent 2006 to Rs 100.66-100.70 (Rs 100.52-100.55) while the 11.64 per cent 2000 went largely unchanged (Rs 101.09-101.11).
FORECAST: Bond prices seen holding firm on Saturday.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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