Call Money
Call rates fell towards the end trades on Monday. Opening the day at 7.75-8%, unchanged from its Friday’s close, call rates fell towards the end of the day. The opening level of 7.75-8% was the intra-day high and call rates closed at its intra-day low. “Demand was higher in the morning and higher price levels were being quoted. Liquidity improved towards the end of the day and there was not much demand which led to the fall in the call rates”, a dealer said. The Reserve Bank of India (RBI) mopped up Rs 1,500 crore in its one-day repos auction at the cut-off rate of 6.50 per cent while it accepted one bid of Rs 100 crore in its reverse-repos auction at the cut-off rate of 8.50 per cent. Call rates were seen at 7.25% levels at close. The RBI’s repos auction did not affect the liquidity. Meanwhile, the NSE pegged its overnight Mibid and Mibor at 7.69% and 7.94% respectively.
FORECAST: Call rates seen softening on Tuesday.

Spot Dollar
The rupee fell by four paise against the dollar on Monday. Opening the day at 46.9525/9575, at similar levels as its Friday night close of 96.9650/97506, the rupee fell towards the end of the day. The morning trading session saw the rupee’s intra-day high of 46.9475/9525 but fell in the afternoon session on demand. The rupee closed at its intra-day low of 46.9850/99 after heavy demand. “Dollar demand from companies exerted pressure on the rupee in the afternoon. Some oil companies purchased dollars in the afternoon which led to the extra demand”, a dealer said, adding that the rupee will continue to rule in the range of 46.95-47.05 in the next few days. Meanwhile, the RBI fixed its reference rate for dollar at 46.95, as against its previous fix of 46.96. Meanwhile, in cross-currency trades, the euro was quoted higher at 40.09 while the pound-sterling was quoted slightly lower at at 65.17 .
FORECAST: The rupee seen between 46.95-47.05 on Tuesday.

Forward Premiums
Forward premiums softened marginally on Monday. Both the six-month and one-year annualised premia closed lower at 4.97% from their Friday’s close of 5.15% and 5.16% levels respectively. The forward premia fell on increased liquidity. The fall in the call money market contributed to the softening of forward premia on monday. The rupee fell by four paise and closed at 46.9850/99 on Friday after increased dollar demand towards the end of the day. The benchmark six-month forward dollar premiums payable at end-November closed at 108/109 paise, four paise lower from its close on Friday at 112/113 paise. Cash/tom closed lower at 50/55 paise while cash/spot closed lower at 1.00/1.10 paise. Otherwise, June dollars closed a shade lower at 9.5/10 paise, while in the far forwards, December dollars closed lower at 127/129 paise with May’02 dollar lower at 223/225 paise.
FORECAST: Forward premiums seen holding steady on Tuesday.

Gilts
Gilts prices gained on Monday. The benchmark 11.50% 2011A paper rose by 53 paise and was seen at Rs 110.88 while the 11.40% 2008 rose by 42 paise and was seen at Rs 109.58. The 11.43% 2015 was seen at Rs 109.82. Prices opened strong and longer-end securities saw a rise by around 40 paise on buying interest. “Last week’s positive momentum has carried into this week. The market is comfortable and is bidding up bonds. Falling call rates have also helped.” a dealer said. The RBI mopped up Rs 1,500 crore in its one-day repos auction at the cut-off rate of 6.50 per cent while it accepted one bid of Rs 100 crore in its reverse-repos auction at the cut-off rate of 8.50 per cent. Trades worth Rs 510 crore were seen in the 11.50% 2011A paper, while those in the 11.40% 2008 and the 11.43% 2015 amounted to Rs 525 crore and Rs 190 crore respectively.
FORECAST: Gilt prices seen gaining a shade on Tuesday.

(Compiled by Ujjal K Basu Roy)