CALL MONEY
Call money rates ended around 10 per cent on Thursday. Dealers said adequate supplies from OMO by the central bank prevented rates from rising sharply. The overnight interest rates opened at 9.90-10.10 % as compared to Wednesday's close of 9.50-9.75 % . ``The RBI must have injected liquidity close to Rs 1,000 crore on Thursday. The usually high year-end demand for funds was there, but supplies were enough,'' a primary dealer said. Call money closed at 9.50-10.0%. Dealers said there was a single deal at 8 per cent, but this was a stray deal struck by a financial insitution desperate to deploy funds for a day. Banks and financial institutions usually lower exposures in the market ahead of the year-end, preferring instead to make disburse loans to show higher assets in their balance sheets. Dealers said refinance at the bank rate had almost been exhausted and the central bank's moves to inject liquidity through open market treasury bill purchases prevented rates from rising.
FORECAST: Call money rates seen around 10 per cent on Friday.SPOT DOLLAR
The rupee ended marginally weaker on Thursday against the dollar on demand from some state-run banks. The rupee opened at 43.6025/61 from Wednesday's close of 43.59/5950. The rupee held steady at these levels for most part of the session. However, hectic dollar buying by the SBI and some other state-run banks pushed the rupee lower.
The rupee ended at 43.6050/6075. Dealers said the dollar demand in Wednesday's session outweighed sustained inflows from foreign investors, mainly the foreign institutional investors (FIIs). ``Corporate demand was nominal,'' a state-run bank dealer said. ``The SBI was bidding at 43.6050/6075,'' a dealer with a forex brokerage said. Cash/spot and tom/spot ended at 3.50/4 paise each, while cash/tom closed at 0.50/0.625 paise. The RBI fixed its reference rate for the US dollar at 43.61 as against 43.59 on Wednesday.
FORECAST: The rupee seen steady on Friday.
FORWARD PREMIUMS
Forward premiums fell amid heavy receiving by state-run banks on Thursday. ``It indicates that outlook for interest rates is soft,'' a primary dealer said. The six-month forward premium ended at an annualised 3.33 per cent after opening at 3.47 per cent. On Wednesday, it closed at 3.53 per cent. ``The forward premiums were tracking the spot rupee rather than the call money rates, which they usually do,'' a foreign bank dealer said. Call rates ended at 9.50-10 per cent. ``The fall in premia was more pronounced in the near end,'' a dealer with a forex brokerage said. In the near end, April dollars ended at 12/13 paise, May at 25/27 paise, while among the far forwards, October closed at 81/82 paise and November at 93/94 paise.
Dealers said there was good receivings from banks for the three and six month maturities. They said the premiums mayl be impacted by the call moneyrates on Friday.
FORECAST: Premiums seen range-bound on Friday.
GILTS
Bond prices ended higher on Thursday, spurred by fresh talk of an interest rate cut and widespread buying by state-run banks. ``Traders are expecting the RBI to cut the CRR in the first week of April to facilitate the government borrowing programme. A few state-run banks have been buying long-term bonds in anticipation of a rate cut,'' a primary dealer said. Prices of long-term bonds went up by 50-60 paise in evening trade over mid-morning levels. The 11.99% 2009 bond ended at Rs 06.65 in evening deals compared to Rs 106.15/20 in mid-morning trade. ``Bullishness has returned as the market expects the RBI to start the year with the rate cut, so that there is no devolvement in the first auction itself. The new year will start with a bang in the bond market,'' a dealer in a private sector bank said. The gross government borrowing programme is budgeted at Rs 117,000 crore for the next financial year.
FORECAST: Bond prices seen range-bound on Friday.
-- Compiled by Anurag Joshi
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.