Call Money
Call rates continued to hold steady at 10.20% LEVELS ON Friday. Opening at 10-10.25% from its last close at 9.90-10%, call rates were rangebound throughout the day. "There was not much demand for funds, and the market was squarish", a dealer with a European bank said. Reduced demand for funds saw call rates ease in later day deals to close at 8.50-8.60%. "One of the reasons for the good liquidity was the fact that outflow at the repos-auctions were not much", a dealer with a Gulf-based bank said. The RBI accepted seven bids for Rs 390 crore at its three-day repos auction and six bids for Rs 390 crore at its five-day repos auction. The total outstanding in repos is sharply dow to Rs 4,840 crore. "Call rates will hold at these levels with the cut-off at both the three-day and five-day repos at 10%", an analyst with a primary dealership said. The NSE pegged its overnight Mibid and Mibor at 9.77% (9.93%) and 10.05% (10.27%) respectively.
FORECAST: Call rates seen at 10.20% levels on Saturday.Spot dollar
The rupee fell by 10 paise against the dollar on Friday. Opening the day at 45.6950/7050 from its overnight close at 45.6850/6950, the rupee went to an intra-day low of 45.7850/7950 on good corporate interest for dollars. "There was dollar-interest from corporates and foreign banks. Trades were active", a dealer with a forex brokerage said, adding: "The dollar-buying interest saw the rupee slide by eight paise to 45.7550/7650 by mid-session trades". At close, the rupee was seen at 45.78/79. "Importers were covering their dollar requirements on fears of pressure on the rupee due to rising oil prices", a dealer with a US-based bank said. Cash/spot quoted at 1.80/1.90 paise, cash/tom 1.40/1.60 paise with tom/spot at 0.40/0.50 paise. The Reserve Bank of India fixed its reference rate for the dollar at 45.76 as against the previous fix of 45.68.
FORECAST: Rupee seen at 45.75 levels on Monday.
Forward premiums
Forward premiums continued their uptrend on Thursday. The six-month annualised forward premium was seen at 5.01% (4.85%). "The weakness in the spot-rupee at 45.78 levels saw importers and corporates covering their exposures", a dealer with a forex brokerage said. Opening the day at 45.6950/7050 from its overnight close at 45.6850/6950, the rupee went to an intra-day low of 45.7850/7950 on good corporate interest for dollars. "There was paying interest today, especially in the far forwards, which went up by 6 paise", a dealer with a Gulf-based bank said. Rising global crude oil prices were cited as the reason for the rupee dipping and forward premiums going up. September dollars quoted lower 7/8 paise (8/9 paise) with October at 29/30 paise (27/29 paise) while in the far forwards, April closed at 142/144 paise (136/138 paise) and May at 158/160 paise (153/155 paise).
FORECAST: Premiums seen inching up on Monday.
Gilts
Bond prices dipped on Friday. The 11.40% 2008 was seen at Rs 99.74 with the 12.50% 2004 at Rs 104.76. "A sharply weaker rupee at 45.78 levels affected bond prices", a dealer said, adding: "It is the rupee that is again affecting sentiment in the bond market. Call rates continued to hold steady at 10.20% levels and closes at 8.50-8.60%. Outflows at the repos-auctio were also low. The RBI accepted seven bids for Rs 390 crore at its three-day repos auction and six bids for Rs 390 crore at its five-day repos auction. The total outstanding in repos is sharply dow to Rs 4,840 crore. "There is enough liquidity in the system... call rates are not issue, but the rupee", a dealer said. Total trades on the NSE's wholesale debt segment stood at Rs 815.07 crore. The 11.40% 2004 saw trades worth Rs 354 crore at a weighted average yield of 11.44% with those in the 12.50% 2004 at Rs 105 crore (10.82%).
FORECAST: Bond prices seen dipping a shade on Friday.
(Compiled by Raghu Mohan)
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