FORECAST: Call rates seen at 9% levels on Tuesday.

Spot Dollar
The rupee held steady at 46.09/10 levels on Monday. Opening the day at 46.9/10, it closed at 46.10/11, the rupee held rangebound in thin trades.

"The rupee opened steady, and recovered a shade soon after on some corporates dollar selling. Later, during mid-session, the rupee moved up further and quoted at 46.08/0850", a dealer said, adding: "Sentiment in bullish on the rupee... more so, after the SBI's move to mop up nearly $2 billion through a deposit-programme targeted at non-resident Indians". At close, the rupee was seen at 46.9/9 thereabouts. "There are no market moving factors with the RBI governor stating that he will not undertake any monetary measures", a dealer said, adding: "This is also in a way indicative of the fact that the RBI is confident of the rupee holding its own for some time now". Trades were dull with the New York market shut for a local holiday. The RBI pegged its reference rate for the dollar at Rs 46.08 against its last fix at 46.11.

FORECAST: Rupee seen at 46.07/09 levels on Tuesday.

Forward Premiums
Forward premiums fell a shade on Monday. The six-month annualised forward premia traded at 4.07% (4.13%) while the one-year forward cover closed at 4.08% (4.18%). "Premiums eased marginally following the lower repo-rates of the RBI ", a dealer said. Call rates held softer at under 9% levels after the cutting the repos rate again by another 25 basis points to 8.75%. There was hardly any demand for funds. Premiums came down slightly on receiving pressure. Cash/spot business remained closed on account of New York holiday.

Cash/tom traded between 0.25/0.50 paise. October dollars quoted at 9/10 paise. In the far forwards, April dollars quoted at 102/103 paise with May at 115/116 paise. "All eyes are on the credit policy... but in the forex market, there are no market moving factors with the RBI governor, stating that he will not undertake any monetary measures", a dealer said.

FORECAST: Forward seen holding current levels on Tuesday.

Gilts
Bond prices rose a shade on Monday. The 11.40% 2008 was traded at Rs 100.19 with the 12.50% 2004 at Rs 105.2300. "Bond prices went up after the Reserve Bank of India cut the repos rate by 25 basis points to 8.75%... the central bank accepted five bids for Rs 1,370 crore at its one-day repos and another five bids at its three-day repos. In all, the central bank mopped up Rs 7,730 crore by way of repos", a dealer with a primary dealership said. On the NSEe's wholesale debt segment, trades worth Rs 1,597.61 crore were seen.

Trades worth Rs 365 crore were seen in the 11.40% 2008 at a weighted average yield of 11.37% with those in the 11.30% 2010 at Rs 295.11 (11.59. Trades worth Rs 170 crore were seen in the 12.50% 2004 (10.68%). "There is enough liquidity in the system... despite the progressive reduction in the repos-rate, there have been good outflows", a dealer with a European bank said.

FORECAST: Bond prices seen perking up on Tuesday.

(Compiled by Raghu Mohan).