Call Money
Call rates prevailed at above 10% levels on Tuesday. Opening THE day at 10-10.25% levels after three-day break, call rates ruled in this range on adequate liquidity and less demand for funds. "There was demand for funds in early deals when call rates went to an intra-day high of 10.25%... however, call rates fell below 10% after the initial demand was satiated and the central bank reduced the cut-off price at repos-auction", dealers said, adding: "Money was available at even below nine per cent, but continued to quote at 9-9.50%... there were stray deals at even 8.25-8.50%". The Reserve Bank cut the repo rate to 9.75% cent from 10%. At close, call rates were seen at 9-9.25%. Most of the deals were struck in the region of 9.00-9.50%. The Reserve Bank sucked out Rs 11,780 crore - it accepted 12 bids for Rs 2,505 at its one-day repos and 21 bids for Rs 9,275 at its three-day repo".
FORECAST: Call rates seen at current levels on Wednesday.Spot dollar
The rupee weakened in intra day trade to 46.09/15 on Tuesday, but recovered by close to 46.03/04. Opening the day at 46.09/10, little changed from its last close, the rupee moved in early trades on import dollar covering to touch the day's low of 46.11/1150 just before noon. According to dealers, major corporates were not not seen in the market after the three-days holiday. "Trade were dull today and the rupee was largely rangebound. Despite reports of a likely review of exchange earners foreign currency (EEFC) scheme by the Reserve Bank, sentiments remain unaffected... positive factors like softening trend in international oil market after Saudi Arabia's assurance to increase in output had no impact", a dealer with a forex brokerage said. The Reserve Bank maintained its reference rate for the dollar is Rs 46.07.
FORECAST: Rupee seen at 46.10 levels on Wednesday.
Forward premiums
Forward premiums quoted higher on Tuesday. The sixth-month and one-year annualised forward premia ended lower at 4.61% (4.76%). "A largely steady spot-rupee and softer call rates saw forward premiums close softer", a dealer with a European bank said, adding: "Trades were dull... there was not much of paying or receiving interest". The rupee weakened in intra day trade to 46.09/15 on Tuesday, but recovered by close to 46.03/04. The Reserve Bank cut the repo rate by 25 basis points to 9.75% cent from 10%. The Reserve Bank sucked out Rs 11,780 crore - it accepted 12 bids for Rs 2,505 at its one-day repos and 21 bids for Rs 9,275 at its three-day repo. October dollars was seen at 14/15 paise, Noveember at 31/33 paise while in far forwards, April closed at 121/123 paise and May at 138/140 paise.
FORECAST: Premiums seen quoting softer on Wednesday.
Gilts
Bond prices rose on Tuesday after the Reserve Bank cut its repos rate by 25 basis points to 9.75%. The 11.40% 2008 was seen at Rs 99.85 levels from early quotes at Rs 99.70; the 12.50% 2004 at Rs 105.0200 from Rs 104.8900; and the 11.15% 2002 at Rs 100.9700 from Rs 100.8400 thereabouts. "The secondary market for securities witnessed two-way trades with government bond prices initially falling, but later rallying on fresh buying enquiries after the cut in the repo rate. Short- and medium-tenor papers rose by around 8-9 paise", a dealer with a primary dealership said. On the NSE's wholesale debt segment, trades worth Rs 1,013.88 crore were seen. Trades worth Rs 405 crore were seen in the 11.40% 2008 at a wieghted average yield of 11.44% with those in the 12.50% 2004 at Rs 135 crore at 10.76%.
FORECAST: Bond prices seen perking a shade on Wednesday.
(Compiled by George Glace.)
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.