Overnight rates ruled in narrow band between 9 per cent and 10 per cent on Tuesday. Opening the day at 9-9.10 per cent from its weekend's close at 8.75-9 per cent, call rates were at these levels for most of the day. "Trades were quiet today with Reporting Friday around the corner. There is enough liquidity. Most of the deals were conducted around 9 per cent level. "Call rates will rule at current levels right up to Reporting Friday. Outflows of Rs 5,000 crore last week on account of the Reserve Bank's auction of the 11.99 per cent 2009, and the mop of Rs 2,000 crore via OMO will keep call rate over 9 per cent," a dealer with a European bank said. At close, call rates were seen at early day quotes. The RBI did not receive any bids for the three-day six per cent fixed-rate repos held today. Elsewhere, the National Stock Exchange pegged its overnight Mibid and Mibor at 8.93 per cent (8.94 per cent) and 9.10 per cent (9.16 per cent) with the fortnightly one at 8.71 per cent (8.72 per cent) and 9.24 per cent(9.16 per cent).

FORECAST: Call rates are seen at 9.25 per cent on Wednesday.

SPOT DOLLAR

The rupee closed at 43.42/43 on Tuesday. Opening the day at 43.38/40 from its weekend's close at 43.46/48, the rupee went lower to 43.4475/4575 in intra-day trades. "The rupee was under pressure in early trades, and touched 43.4450/45 by mid-session. Initial trades were volatile, but post-noon, the market turned calm," a dealer with a brokerage said. The SBI was seen checking dollar interest and seen quoting at 43.38/40, but corporate demand for dollars took the rupee to its intra-day low of 43.4475/4575. "There is still good underlying demand for dollars, it will hold current levels for a week unless external factors drive it lower," a dealer with a European bank said. Cash/spot was quoted at 0.3750/0.6250 paise (1/1.25 paise), cash/tom at 1/1.25 paise (0.2750/0.6250 paise) with tom/spot unchanged at 0.3750/0.6250 paise. The RBI pegged its reference rate for the dollar at 43.45 as against its previous peg of 43.54. The euro, meanwhile, opened at 46.52 (46.60) against the rupee, went to a high of 46.74(46.65) before closing at 46.68 (46.41).

FORECAST: Rupee seen at 43.44/45 levels on Wednesday, but could test the 43.50 barrier.

FORWARDS PREMIUMS

Forward premiums quoted a shade higher on Tuesday. The six-month annualised forward cover was seen at 4.90 per cent (4.65 per cent) with the one-year at 5.16 per cent (5.01 per cent). "There was slight paying in December and January," a dealer with a US-based bank said, adding, "The SBI and few other public-sector banks were active in the forward." September dollars were quoted at 28/29 paise (25/26 paise), October at 42/44 paise (40/42 paise), while in the far forwards, January was seen at 97/99 paise (96/98 paise) and February at 114/116 paise (111/114 paise). "There appears to be a bunching of import payments. It is likely to continue till the general elections," a dealer with a US-based bank said.

FORECAST: Six-month annualised forward cover seen at 4.60 per cent on Wednesday.

GILTS

Security prices quoted a shade higher on Monday. The 11.55 per cent 2001 edged up to Rs 102.08 (Rs 102.01-102.04) with the 11.75 per cent 2001 eased to Rs 102.55 (Rs 102.58). "Volumes were poor...the uncertainty in the spot-rupee, and relatively firm call rates at over 9 per cent ahead of Reporting Friday have made trades dull. Nobody is taking a chance," a dealer with a primary dealership said. The 12.40 per cent 2013 dipped to Rs 103.73 (Rs 103.76). "Last weekend's combined outflows of Rs 5,000 crore on account of the auction of the 11.99 per cent 2009 and OMO have dampened trading sentiment," a dealer with a European bank said.

FORECAST: Bond prices will fall on Wednesday.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.