Call Money
Call rates held under 10% levels on Thursday. Opening the day at 9.25-9.50% level, higher from its previous close at 8.75-9.00%, call rates eased during the day and ruled in the 8.75-9.00% range throughout. "There was demand for funds initially, but later when demand was met and with no new banks going for funds, call rates came down", a dealer said, adding: "There was not much demand for funds on the eve of Reporting Friday... most banks had borrowed ahead for their cash reserve ratio requirements". At close, call rates were seen at 8.50-8.75%. The Reserve Bank also cut the repos rate for the third successive day by another 25 basis points to 9.25%. Repos rates have moved down from 10% on Tuesday. The central bank accepted 15 bids for Rs 2,140 at its one-day repos and 11 bids for Rs 1,730 at its five-day repos - both at 9.25%. The National Stock Exchange pegged its overnight Mibor and Mibid at 8.99% and 9.25% respectively.FORECAST: Call rates seen at 8.50% levels on Friday.
Spot Dollar
The rupee declined by two paise in rangebound trades on Thursday. Opening the day at Rs 46.06/08, a shade lower from its last close at Rs 46.04/05, the rupee held these level throughout the day. "The rupee held steady as there was sufficient dollar-supply to meet the demand... it eased to 46.09 in the morning on dollar covering by some corporates. Later, at mid-session the rupee recovered to 46.06/07 per dollar. Most of the big banks were not active today", a dealer said. Lacklustre demand for dollars and absence of market moving factors saw the rupee hold rock steady against the dollar. At close, the rupee was seen at 46.06/07. Cash/spot quoted at 2/2.10 paise with tom/spot 1.75/1.85 paise and cash/tom at 0.35/0.40 paise. The Reserve Bank pegged its reference rate for the dollar at Rs 46.09 against its last fix at 46.05.
FORECAST: Rupee seen at 46.07/09 levels on Friday.
Forward Premiums
Forward premium quoted softer on Thursday. The six-month annualised forward premia traded at 4.36% (4.61%). "Adequate liquidity in the money market and less players going for funds reduced call rates sufficiently... moreover, the lowering of the cut-off price by the Reserve Bank at its repos-auction softened forward premium", a dealer said. The Reserve Bank cut the repos-rate for the third successive day by another 25 basis points to 9.25%, and call rates finished at 8.50-8.75% on the eve of Reporting Friday.
"Forward premium eased marginally tracking a steady spot-rupee at 46.07/07 levels and due to the central repos-rate cut to 9.25%, a dealer said.
September dollars quoted at 10/10.50 paise, down from its overnight close at 14/15 paise with October at 26/28 paise. In the far forwards, April dollars quoted at 123/125 paise with May at 138/140 paise.
FORECAST: Forward premiums seen holding current levels on Friday.
Gilts
Bond prices rose a shade on Thursday after the Reserve Bank cut its repos rate by another 25 basis points to 9.25%. The 11.40% 2008 was heavily traded and was seen at Rs 99.8000 (Rs 100.10) with the 12.50% 2004 at Rs 105.1000."Trades were active after the central bank cut the repos rate for the third day in a row to 9.25%", an analyst with a primary dealership said.
Bond-prices also turned bouyant after the central bank's auction of the 11.30% 2010 sailed through. The central bank received 204 bids for Rs 7,087.22 crore against the notified amount of Rs 2,000 crore. The Reserve Bank accepted 78 bids for Rs 3,000 crore. The cut-off price was Rs 99.79. On the National Stock Exchange's wholesale debt segment, trades worth Rs 1,417.45 crore were seen. Trades worth Rs 420 crore were seen in the 11.40% 2008 with those in the 12.50% 2004 at Rs 160 crore.
FORECAST: Bond prices seen perking up on Friday.
(Compiled by George Glace.)
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