Call money
Call rates held rangebound on Monday. Opening the day at 7.15-25%, lower from its Saturday's close of 7.25-50%, the call rates remained steady owing to the release of Rs 2,100 crore of incremental funds after the second tranche of the cash reserve ratio (CRR) cut came into effect. However, the rates touched their intra-day high at 7.40% despite easy liquidity in the system. "The spurt in call rates was mainly because banks sought to cover their reserve requirements at the start of the fortnight. With liquidity expected to tighten after the tax outflows later this week, banks are likely to continue covering their requirements," I-Sec said. At close, call rates were seen around at 7.20%, lower from their previous closing levels. The RBI did not receive any applications for its repo and reverse-repo auctions. Elsewhere, the NSE pegged its overnight Mibid and Mibor at 7.13% and 7.28% respectively.FORECAST: Call rates seen around 7.25-7.50% levels on Tuesday.
Spot dollar
The rupee weakened slightly against the dollar on renewed demand from corporates and importers on Monday. Opening at 46.54/55, lower from Saturday's closing level of 46.52, the rupee declined further at the inter-bank foreign exchange market. The rupee weakened to its intra-day low at 46.56/5650. "Banks went long in the morning session on dollar in anticipation of higher demand later in the day. Concerns over events at the stock exchanges have also caused some nervousness in the spot trades," a forex dealer said. At close, the rupee was seen at 46.55/56, three/four paise weak from its previous closing levels. Most dealers expect the rupee to be rangebound at current levels on Tuesday. Meanwhile, the RBI fixed its reference rate for dollar at 46.55, against its previous fix of 46.53. In cross-currency trades, the euro was quoted at 43.42/45 with the pound- sterling at 68.28/30.
FORECAST: The rupee seen more or less steady on Tuesday.
Forward premiums
Forward premiums moved up marginally on Monday. The six-month and one-year annualised premia ended at 4.25% and 4.50% respectively. The premiums went up as the rupee weakened by three/four paise from its Friday's levels. The rupee ended at 46.55/56 today after trading in a narrow range between 46.5350 and 46.5650. "Steady dollar demand from public sector banks exerted pressure on the rupee", a dealer said adding: "Concerns over events at the stock exchanges also made banks go long on the dollar." The BSE's sensitive index tumbled down by 114.07 points to close at 3767.89 on a fresh wave of selling. The short-end premiums ended 1/1.5 paise lower, however, the premiums in far forwards remain steady against the previous close. March dollar traded at 7/8 paise, while in the far forwards, August traded at 93/95 with September at 108/110.
FORECAST: Forward premiums seen rangebound on Tuesday.
Gilts
Bond prices eased marginally on Monday. The 11.40% 2008 paper traded at Rs 109.17, with 11.30% 2010 at Rs 108.79 and 12.50% 2004 at Rs 109.05. "The secondary market for securities remained subdued and prices of government bonds drifted lower on modest profit-booking. Prices of medium tenor papers fell by 10 paise while those at the longer-end declined by 15-20 paise, a dealer said. There was easy liquidity in the system on the release of Rs 2,100 crore of incremental funds after the second tranche of the cash reserve ratio (CRR) cut came into effect. Call rates held rangebound amidst ample liquidity. On the NSE's wholesale debt segment, trades worth Rs 2,188.50 crore were seen. Trades worth Rs 480 crore were seen at 11.40% 2008 paper, while those in the 11.30% 2010 and 12.50% 2004 traded at Rs 310 crore and Rs 180 crore respectively.
FORECAST: Bond prices seen moving down on Tuesday.
(Compiled by Atmadip Ray)
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
