Call rates ended easy at 7.90-8 per cent on Monday on the back of easy liquidity. Opening the day at at 8-8.05 per cent from its weekend's close at 8-8.05 per cent, call rates were quoted in the 7.95-8.05 per cent range throughout the day. "The markets remained fairly liquid though excess funds have been sucked out through the Rs 5,000 crore twin-bond auction last week," a dealer with a primary dealership said. The system has witnessed inflows to the tune of Rs 6,300 crore over the previous week on account of redemption of dated securities and coupon payments. "Even the usual borrowing to square off refinance availed off from the RBI was missing," a dealer said. Banks and primary dealers receive refinance at the bank rate from the RBI. "Lenders were willing to lend at 8 per cent, but borrowing demand remained fairly nominal," a dealer with a state-run bank said.
FORECAST: Call rates may remain in the same range on Tuesday.Spot Dollar
The rupee ended steady on Monday in active tradesmarked by early import buying and heavy dollar inflows. Opening the day at 43.39/40 from its last close at 43.3950/40, the rupee firmed up in early trades. "There were inflows with foreign institutional investors (FIIs) buying on the bourses. This allowed the rupee to gain to 43.3850/39 levels". Fresh inflows also offset the marginal decline in the rupee's value in the early part of the session. In the morning, there was demand for dollars from state-run banks who bid on behalf of large companies including a petrochemical giant," a dealer with a forex brokerage said. At close, the rupee was seen at 43.395/40. "On the higher side, there was some bids also at 43.4050," a dealer said. Cash/spot ended at 0.25 paise after touching par on good receiving.
FORECAST: Spot rupee is seen at 43.39/40 levels on Tuesday.
Forward Premiums
Premiums declined slightly on Monday as the forward market remained influenced by easy call rates which finished at 7.90-8 per cent as compared to 8-8.05 per cent onSaturday. The six-month premium ended softer at an annualised 4.61 per cent (4.74 per cent) with the one-year premium at 4.85 per cent (4.97 per cent).
"There was heavy receiving (buy-sell swaps) in the forward market", a dealer with a state-run bank said. "Easy liquidity in money markets which saw call rates dip below the crucial eight per cent refinance level and exporter interest to cash in on premiums drove premiums lower", dealers said. Monthly premiums were 11/12 paise for December, 31/32 paise for January paise, 46/47 paise for February while in the far terms, June was seen at 115/117 paise and July at 133/135 paise.
FORECAST: Forward premiums are seen at lower levels on Tuesday.
Gilts
Bond prices quoted stable in evening trade on Monday after witnessing some buying support in morning trades. The 11.99 per cent 2009 was dealt at Rs 103.41 (Rs 103.40) at the fag end of trading. The 12.32 per cent 2011 was quoted at Rs 104.76 (Rs 104.73), 12.40 per cent 2013 at Rs 105.05 (Rs104.98) with the 11.83 per cent 2014 at Rs 101.019 (Rs 101.015). Dealers said that dealers remained cautious about future liquidity and were unwilling to take fresh positions at the present high levels. Security prices have witnessed an impressive uptrend in the recent times due to ample liquidity. Dealers are uncertain about a bond auction in the coming days. RBI has announced cash infusing measures from December 1 to keep liquidity comfortable. "Call money have also eased but there is a likelihood of a bond auction or a securities sale list announcement this week and this could lead to selling pressure," a dealer said.
FORECAST: Bond prices may firm on buying support on Tuesday.
(Compiled by Anurag Joshi)
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.