Call money
Call rates on Thursday ended steady amid poor demand from players. The overnight interest rates opened at 7.05-7.15%, unchanged from Wednesday's close. "The rates would have quoted below 7% levels. But the lenders were not ready to disburse funds below this level," a dealer said. Dealers said the call rates hovered around 7 and 7.20%throughout the day, ending at 7-7.10 %. TheRBI received no bids at reverse repo auction. "The call rates ruled below the floor for reverse repo funding at 9%. This discouraged players from going in for funding above this rate," a PSU bank dealer said. Nothwithstanding the private placement of 11-year paper, dealers said liquidity remained good. There was an inflow of Rs 600 crore. The Centre on Monday mopped up Rs 3,000 crore via private placement of the 11-year bond at a YTM of 11.09 %. "Borrowing interest was not there and this allowed the call rates to hover in a narrow range," a dealer said.
FORECAST: Call rates seen around 7 per cent on Friday.Spot dollar
The rupee on Thursday ended six paise weaker on heavy dollar demand from state run banks. The rupee opened at 44.68/685, little changed from Wednesday's close of 44.68/6825. The currency began weakening in the morning session on hectic dollar demand from the State Bank of India (SBI) the morning, reportedly on behalf of some public sector units. "Other banks joined in following buying by SBI," a dealer with a forex brokerage said. "This was followed by demand from importers and corporates," dealers said. The rupee had ended at an time low of 44.95 on June 8. The rupee ended lower at 44.745/755. Meanwhile, the RBI fixed its reference rate for the US dollar at 44.73 per US dollar as against the previous fix of Rs. 44.68. Cash/spot and cash/tom ended at 0.25/0.50 paise each.
FORECAST: The rupee seen weaker on Friday in case dollar demand continues.
Forward premiums
Premiums on Thursday tracked a weak rupee to ended higher. Near forwards rose by 4-5 paise while far forwards moved up by 5-6 paise. "There was paying pressure notably in the one, three and six month maturities," a dealer said. The six month premium closed higher at 3.44 per cent as against Wednesday's close of 3.13 per cent. The one year premium ended at 3.40 per cent as against 3.20 per cent in the previous session. July dollars ended at 9/10 paise, August at 21-22 paise, while in the far end January ended at 84/85 paise and February at 98/99 paise. "The premiums moved in tandem with the rupee as players booked for the months ahead in anticipation of a weaker rupee. In the money market, call rates ruled easy and ended at 7.00-7.10 per cent, unchanged from the previous day's close.
FORECAST: Premiums seen range-bound on Friday.
Gilts
Gains in the government bond market were eroded on profit-booking by players on Thursday. Short and medium term bonds rose by 5-10 paise in the morning session, but shed some ground during the afternoon session. The 11.90% 2007 rose to Rs 106.42 from Wednesday's close of Rs 106.38. The bond ended at Rs 106.40. The 11.68 per cent 2006 bond ended at Rs 105.36 as against the previous close of Rs 105.43. "The sentiment has by and large been positive as call rates have ruled steady. The rupee has also traded in a narrow range," a private bank dealer said. "Any auction announcement in the coming days will drive down prices," he added. The Centre on Monday evening mopped up Rs 3,000 crore through private placement of the 11-year bond at a YTM of 11.09 per cent. The Centre has targeted a gross borrowing programme of Rs 1,17,000 crore for the current fiscal.
FORECAST: Bond prices seen holding current levels on Friday.
-- (Compiled by Anurag Joshi)
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