In reverse repo auction, the Reserve Bank accepted 15 bids for Rs 1,760 crore for one-day at 10.25%. The Reserve Bank of India pegged its overnight Mibid and Mibor rate at 10.38% and 10.69%.

FORECAST: Call rates seen at current levels on Tuesday.

Spot dollar
The rupee gained some strength against the dollar after its worst stand against dollar when it fell to its life-time low at 46.43/45. Opening .at 46.31/33, the rupee quoted almost unchanged. A few foreign and state-run banks off-loaded their long-dollar positions. Fresh import dollar demand pushed down the rupee to 46.32 late in the morning, but it rallied up to 46.28/29 by mid-session. The escalation of tension in middle-East had resulted in a rise in the already high oil prices, which had led to the fall in the value of rupee on Friday. "... a dealer said.adding: "The strengthning of rupee and a hope that situations may improve resulted in many corporates and banks selling dollars, which saw comfortable liquidity in market". At close, the rupee was seen at 46.31/32. The Reserve Bank of India pegged its referance rate for the dollar at 46.32 against its previous fix at 46.307.

FORECAST: Rupee seen holding current levels on Tuesday.

Forward premiums
Forward premium quoted a shade softer on Monday. The six-month and one-year forward premiums quoted at 4.73% and 4.79% respectively. "The improved market sentiment after the commencement of peace talk in the middle-East and the decrease in the value of oil prices has helped the rupee strengthen against greenback... during the day, many corporates and banks, both local and foreign banks were selling dollars", a dealer said. October dollars quoted at 9.75/10.25 paise while in the far forwards, April quoted at 116/118 paise with May at 131/133 paise. "Tracking the strong spot rupee, forward premiums eased on receiving by state-run banks", a dealer said. The rupee closed on Monday at 46.31/32. On Friday, the rupee had went to a life-time low of 46.43/45. Cash/spot quoted at 1.15/1.20 paise with both cash/tom and tom/spot at 0.55/0.60 paise apiece.

FORECAST: Premiums seen holding current levels on Tuesday.

Gilts
Bond prices fell a shade on Monday. The 11.40% 2008 was traded at Rs 99.7900 and 12.50% 2004 at Rs 105.0500. "There was only a marginal change in bond prices. Market sentiment improved after the commencement of peace talks in Egypt and also due to reduction of oil prices", a dealer said. Call rates held below 11% levels on Monday after opening the day at 10.50-10.75%. Call rates fell during the day due to sufficient liquidity and less demand for the same. On the National Stock Exchange's wholesale debt segment, trades worth Rs 603.35 crore was recorded. Deals worth Rs 170 crore were seen in the 11.40% 2008 at a weighted average yield of 11.44% with those in the 11.83% 2003 at Rs 95 crore (10.62%). The 11.15% 2002 was traded for Rs 50 crore at a weighted yield of 10.52%.

FORECAST: Bond prices may gain a shade on Tuesday; rupee holds key.

(Compiled by George Glace)