Call Money
Call rates ruled in a narrow range of 8% and 8.35% on Monday. Opening the day at 8.25-8.35% from its previous close at 8.25-8.50%, call rates eased further to 8-8.25% on ample liquidity and less players going for funds."Call rates held rangebound due to ample liquidity in the market, which saw a further inflow of funds after the RBI pumped in Rs 5,000 crore through its reverse-repos auction", a dealer with a Gulf-based bank said. There was scaled-down demand for funds as most banks had covered their reserve needs before the Saturday holiday for `Diwali'. In fairly active business, the market ended squarish. At close, call rates were seen at 8-8.25%. The RBI mopped up Rs 6,125 crore from the system - Rs 2,000 crore at its one-day repos and Rs 4,125 crore at its three-day repos - both at cut-off rate of 8%. The NSE pegged its overnight Mibid and Mibor at 8.19 per cent and 8.37%.
FORECAST: Call rates seen at 8.50% thereabouts on Tuesday.Spot dollar
The rupee touched a new life-time low at 46.90/91 on Monday. Opening the day at 46.72/75, little changed from its previous close at 46.74/75, the rupee fell by around nineteen paise on heavy demand for the dollars from state-run banks and corporates. "The market witnessed heavy demand for dollars from state-run banks and corporates... lower supply of greenback plunged the rupee to 46.90/91 levels, which is a new life time low for the rupee against the greenback", a dealer said. The rupee's fall was arrested after the State Bank of India and other banks sold dollars in the market after the Reserve Bank of India asked them to do so and this saw the rupee regaining its strength to quote at 46.65/67 level at close of trades. This is the first time since the rupee was seen losing ground that the RBI has decided to intervene. Cash/spot was quoted at 0.45/0.55 paise with both cash/tom and tom/spot at 0.25/0.30 apiece.
FORECAST: Rupee seen gaining to 46.50 levels on Tuesday.
Forward premiums
Forward premiums quoted a shade softer on Monday. The six-month forward premium was quoted 4.20% (4.30%). Forward premiums tracked the rupee and moved higher during in early trades, but the strengthening of the rupee after the "verbal intervention" of the Reserve Bank of India and ample liquidity in the call money market eased forward premiums and they quoted lower at by close of trades", a dealer said. Call rates moved lower and closed at 8-8.25% level on ample liquidity. The Reserve Bank of India also pumped in Rs 5,000 crore through its reverse-repos auctions. November dollars quoted at 14/15 paise (15/16 paise) while in the far forwards, April quoted at 98/99 paise (99/100 paise) with May at 113/114 paise (114/115 paise).Forward premiums moved with the market sentiment and is expected to be rangebound in the coming days.
FORECAST: Premium seen quoting softer on Tuesday.
Gilts
Bond prices rose a shade due to ample liquidity and strengthening of the rupee in post-noon trades on Monday. The 11.40% 2008 was traded at Rs 100.15 (Rs 99.98) with the 12.50% 2004 at Rs 105.13 (105.06). The rupee touched a new low of 46.90/91 level due to heavy demand for greenback from corporates and state-run banks. The RBI today verbally intervened for the first time after the rupee started its downward trend against the dollar by asking the SBI and other banks to sell dollars in the market, which eased the pressure on the rupee. The call money market witnessed ample liquidity and call rates closed at 8-8.25% levels. On the National Stock Exchange wholesale debt segment, trades worth Rs 772.35 crore were recorded. Deals worth Rs 307.35 crore were seen in the 11.40% 2008 at a weighted average yield of 11.40% while those in the 11.03% 2012 amounted to Rs 130 crore (11.70%).
FORECAST: Bond prices seen gaining on Tuesday.
(Compiled by George Glace)
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