The overnight call rates opened easy at 7.25-7.5 per cent on the reporting Friday as against the previous close of 8.80-9 per cent. Money market dealers expect the rates to stay easy on account of reduced demand and coupon inflows to the tune of Rs 600 crore and reduced demand. Three-day funds were available at 8-8.05 per cent on reporting Friday. Dealers said they expected a bond auction in the forthcoming week and it could cause some liquidity concerns due to which they expected rates to be a little firm in the new reporting period. Due to marginal demand in the later half of the day, the call rates firmed up and settled at 8 per cent towards the day's close. "Trading was thin in the money market," dealers said. According to dealers the inflow of Rs 3,500 crore expected on June 29 from redemption of floating rate bond and interest payment on a few securities is not expected to ease call rates below the existing 8 per cent levels.

FORECAST: Call rates are expected to rule around 8 per cent on Saturday.

SPOT DOLLAR

The rupee ruled steady in early deals on Friday. The Indian currency opened at 43.57/575 against dollar, unchanged from their previous closing levels. During the day the rupee ruled between 43.565/575 against the greenback to finally settle at 43.56/57 against the dollar towards the day's close."There was large import demand which had been seen all of this week, but exporters had placed sell orders at levels close to 43.58," dealers said.According to dealers, most of the import demand was for near maturities. Dealers said they expected state-run banks to support the market with dollar supplies as they have been doing during the week. The rupee opened at 45.68 against euro, recorded an intra-day low of 45.95 to finally settle at 45.58 against euro towards the close.

FORECAST: The Indian currency is expected to open at 43.55/58 against the dollar on Monday.

FORWARD PREMIUMS

Forward premiums in the near-term were under pressure on account of the import paying and rollover of maturing contracts. Dealers maintained that with call rates around 8 per cent level, the pressure on near term liquidity is reduced. The six-month premium ended at 5.32 per cent (5.35 per cent), three months at 5.05 per cent and one month at 5 per cent level. At the shorter end, September premium quoted at 0.50-1 paise ( 1-1.50 paise), October at 18-20 paise (18-22 paise), November at 33-38 paise (38-42 paise), December at 55-57 paise (57-59 paise), January at 78-80 paise (78-82 paise) February at 96-99 paise (97-103 paise), March at 116-118 paise (117-120 paise). At the longer end, April premium quoted at 137-139 paise (139-142 paise), May at 158-160 paise (159-162 paise), July at 198-200 paise (195-201 paise) and August at 216-218 paise (215-219 paise).

FORECAST: Six month annualised premium expected to rule between 5.30-5.35 per cent on Monday.

GILTS

The announcement of a bond auction for a notified amount of Rs 2,500 crore slated for September 28 on Friday did not have much impact on government securities prices owing to thin trading on account of Ganapati immersion. According to money market dealers, the market was quite dull owing to lacklustre trading during the day. "The market was expecting a auction next week to coincide with the Rs 3,500 crore inflow expected to come into the system on September 29," dealers said. The government security prices moved up by 2-3 paise during the day despite easy call rates. "Traders are uncertain about the yields at the bond auction scheduled next week," dealers said. During the day, 11.99 per cent 2009 bond was dealt at Rs 102.45 (102.48), 11.15 per cent 2002 was dealt at Rs 101.02 (101.04), 12.30 per cent 2016 paper was quoted at Rs 102.58.

FORECAST: Gilts prices are expected to rule steady on Saturday.

-- Compiled by Pratibha Rathore