Call rates closed on Friday at 8.05-8.10 per cent. Outflows from the Reserve Bank's auction of the 11.90 per cent 2007 for Rs 2,500 crore did not impact on the market. Opening the day at 7.75-7.90 per cent from its last close at 7.90-8 per cent, call rates ruled remained rangebound. "There is enough liquidity in the system, and call rates quoted between 7.75 per cent 7.90 per cent for most of the day. The Reserve Bank auction basically negated inflows of around Rs 2,800 crore this fortnight by way of coupon payments on dated securities, and redemptions of T-bills", a dealer with a US-based bank said. The Reserve Bank did not receive any bid at its four-day six per cent fixed rate repos. Elsewhere, the National Stock Exchange pegged its overnight Mibid and Mibor rates at 7.51 per cent (7.99 per cent) and 7.94 per cent (8.08 per cent) with the fortnightly quotes at 8.49 per cent (8.44 per cent) and 9.12 per cent (9.08 per cent).

FORECAST: Call rates seen between 7.90 per cent and8.10 per cent on Saturday.

Spot Dollar

The rupee weakened by two paise in intra-day trades to 43.39/40 on Friday. Opening the day at 43.37/38 from its last close at 43.3750/3850, the rupee was seen at 43.3750/38 levels till mid-session trades. Later, corporate interest for dollars saw the rupee go its intra-day low of 43.39/40 before recovering to close at 43.3850/3950. "Month-end demand was not seen this week, but there was a little bit of activity today", a dealer with a Gulf-based bank said. The rupee has been holding firm between 43.36 and 43.38 for most of this week. Cash/spot quoted at 1.75/2 paise (2/2.25 paise). Cash/tom and tom/spot quotes were off with New York remaining closed on Monday. The Reserve Bank maintained its reference rate for the dollar at 43.38. Elsewhere, the rupee quoted at 44.35 (44.86) against the Euro in opening trades, went to an intra-day low of 44.45 (45.06) before closing at 44.34 (44.85).

FORECAST: Rupee seen holding 43.39 levels on Monday.

ForwardsPremiums

Forward premiums eased further by two to three paise on Friday. The six-month annualised forward cover ruled unchanged at 5.15 per cent (5.25 per cent) with the one-year quoting at 5.88 per cent (6.06 per cent). August dollars quoted unchanged at 29/30 paise (31/32 paise) with September at 48/49 paise (50/52 paise). February premiums were seen at 155/157 paise (161/162 paise), March at 179/181 paise (185/187 paise) and April at 202/205 paise (210/211 paise). "There is hardly any activity in the forward. Premiums eased further today with call rates easing up a bit despite outflows of Rs 2,500 crore as a result of the Reserve Bank's 11.90 per cent 2007 auction", a dealer with a European bank said.

FORECAST: Six-month annualised forward seen at 5.15-5.20 per cent levels on Monday.

Gilts

Gilts prices fell by by one to two paise in intra-day trades on Friday. The 12.32 per cent 2011 paper was seen at Rs 101.75 (Rs 101.78); 12.40 per cent 2013 held steady at Rs 101.40 levels withthe 11.98 per cent 2004 also doing likewise at Rs 102.30. "Prices moved only marginally. The re-issued 11.90 per cent 2007 was quoted at 100.76", a dealer with a primary dealership said. The Reserve Bank had pegged a cut-off price of Rs 100.80 at the auction of the 11.90 per cent 2007. "There is enough liquidity in the inter-bank markets. Quite a few players in the market queued up at the Reserve Bank window when the 12.30 per cent 2016 was put up for sale", a dealer with a US-based bank said. The 13.05 per cent 2007 was dealt at Rs 106.45 (Rs 101.50 levels) with the 11.75 per cent 2001 paper holding firm at Rs 101.48 levels.

FORECAST: Bond prices seen holding current levels on Saturday.