CALL MONEY
Call rates ended steady at 7.75-8 per cent on Thursday riding on the back of ample liquidity. Opening the day at 7.75-7.95 per cent from its previous at 7.80-8 per cent, call rates rule rangebound throughout the day. "Liquidity remained sufficient to take care of the nominal demand for funds to repay refinance availed by participants from RBI at 8 per cent", dealers said. Call rates touched an intra-day low of 7.60 per cent, with stray deals taking place at 7.55 per cent too. "The demand to cover positions ahead of reporting Friday remained nominal," a dealer said. "The RBI's liquidity enhancing measures also aided the call rates to remain soft," a dealer with a primary dealership said. From December 1, the RBI will treat cash in banks' vaults as eligible for CRR balances, which is expected to lower demand for cash by Rs 4,500 crore.
FORECAST: Call rates seen at 7.50-7.75 per cent on Friday.SPOT DOLLAR
The rupee ended marginally higher against the dollar on Thursday. Opening firmer at 43.3950/40 from theprevious close of 43.3950/40, the Indian unit showed signs of strengthening on fresh dollar inflows into the market. "There was good export receivings coupled with dollar supplies from some banks. Import demand did arrest the rupee's rise, though it was not strong enough to allow the rupee to weaken significantly. The rupee endedat 43.40/4050 per dollar ascompared with its previous close at 43.4050/4075. Cash/spot and cash/tom ended at 1/1.25 paise and 0.125-0.25 paise respectively. Meanwhile, the RBI maintained the reference rate for the dollar at 43.41. The rupee closed at 69.31 against the pound sterling and 43.72 per euro.
FORECAST: Rupee seen at 43.3950/40 levels on Friday.
FORWARD PREMIUMS
Premiums eased on Thursday due to easy liquidity conditions in the money market. The six-month annualised premium ended at 4.24 per cent against Wednesday's 4.41 per cent. Dealers said there was heavy receiving (buy-sell swaps) in forward premiums from exporters and banks.
"Exporters were offloading in the far forwards," a state-run bank dealer said. Call rates, which ended easy at 7.75-8 per cent aided the downtrend in the forward segment. Near forwards eased by 2-3 paise, while far forwards fell by 5-6 paise.
December dollar quoted at 7.5/8.5 paise, January 25/26 paise, February 40/41 paise, March 55/56 paise while in the far terms April was seen at 71/73 paise, May 87/89 paise and June 103/104 paise.
FORECAST: Premiums seen at lower levels on Friday.
GILTS
Bond prices rose sharply on Thursday boosted by low call rates and excess liquidity in the market. Prices of long-dated bonds were up by 50 paise while short and medium dated securities were up by 20 paise from Wednesday's closing levels. The 11.83 per cent 2014 bond rose to Rs 102.08 (Rs 101.55/60), the 12.40 per cent 2013 bond was dealt at Rs 106 (Rs 105.32/34). Dealers attributed the rally in bond prices to low call rates and easy liquidity in the money market. "The soft call rates and no indications of a bond auction from the RBI has fuelled the demand for gilts," a dealer with a primary dealership said. Call rates ended steady at 7.75-8 per cent on Thursday on the back of ample liquidity after opening at 7.75-7.95 per cent and remaining rangebound throughout the day.
FORECAST: Bond prices expected to continue rally on Friday.
(Compiled by Anurag Joshi)
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.