CALL MONEY
Call rates quoted a shade higher on Tuesday over 8.25% levels. Opening the day at 8.25-8.30% from its last close at 8-8.10 per cent, call rates went higher on reversal of Y2K liquidity measures. "Around Rs 4,500 crore went out of the system as cash in vaults became ineligible for cash reserve ratio purposes", a dealer with a European bank said, adding: "Call rates eased later in the day as on the whole liquidity is comfortable". Inflows of around Rs 3,000 crore are due on February 3 with the redemption of the 12.60 per cent 2000 and the zero-coupon 2000. Total inflows during the current reporting fortnight is expected to be nearly Rs 5,800 crore. "Most banks, which had temporary mismatches covered in the morning," a dealer with a primary dealership said. At close, call rates were seen at 8.10-8.15 per cent. The bulk of the deals were struck in early trades at about 8.20-8.25 per cent levels.
FORECAST: Call rates seen at 8.05-8.10% on Wednesday.SPOT DOLLAR
The rupee finished a shade stronger on Tuesday at 43.60/6050. Opening the day at 43.6250/63, little changed from its last close at 43.6250/6350, the rupee was on a slightly upward curve with corporate-demand for dollars relatively on the wane. "The rupee opened nearly steady and Rs 43.6125/6175 by mid-session. There was ample dollar supply coupled with nominal demand from corporates... trades were dull with major players kept away", a dealer with a brokerage said. On Monday, the rupee had come under pressure on the on the back of month-end corporate interest for dollars. SBI's dollar sales helped the rupee to recover and close at 43.6250/6350. The Reserve Bank of India fixed its reference rate for the dollar at 43.61 as against Friday's 43.64.
Cash/spot ended at 0.50/0.6250 paise (0.50/0.75 paise), cash/tom unchanged at 0.25/0.3750 paise with tom/spot also.
FORECAST: Rupee seen at 43.64 levels on Wednesday.
FORWARD PREMIUMS
Forward premiums moved a shade higher in intra-day trades on Tuesday tracking higher call rates at 8.30 % levels though they came off by close of trades. In the near-terms, February dollars finished at 9/10 paise (11/12 paise), March at 21/22 paise (23/24 paise) respectively, while in the far forwards, June ended at 54/56 paise (55/57 paise) and July at 65/66 paise (67/69 paise). "There is little by way of market moving factors... the recovery in the spot rupee to 43.60/6050 by close and easing of call rates to 8.10-8.15 per cent saw premiums soften over their Monday's finishes" a dealer said. The country's foreign exchange reserves rose to $35.170 billion on January 21 from $35.101 billion in the previous week, the RBI said in its weekly statistical supplement on Saturday. "Premiums went up a shade following Rs 4,500 crore of cash in vaults became ineligible for cash reserve ratio purposes", a dealer with a European bank said.
FORECAST: Forward premiums seen softening on Wednesday.
GILTS
Bond prices held flat on Tuesday. At close, the 11.83 per cent 2014 was seen at Rs 104.75 (Rs 104.73); 11.99 per cent 2009 at Rs 106.73 (Rs 106.72) with the 12 per cent 2008 at Rs 106.84 (Rs 106.87).
"Bond prices slipped a bit in early trades when call rates went up to an intra-day high of 8.30 per cent levels.... This was after around Rs 4,500 crore went out of the system as cash in vaults became ineligible for cash reserve ratio purposes", a dealer with a primary dealership said. I-Sec in its report on Monday said that liquidity will be balanced in the new fortnight even after the reversal of measures taken to ensure liquidity for the Y2K event is reversed as coupon inflows of Rs 1,875 crore and government security redemption of Rs 3,000 crore during the fortnight.
FORECAST: Bond prices seen firming up on Wednesday.
-- Compiled by Raghu Mohan
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.