Call Money
Call rates firmed slightly in early trade after Reserve Bank of India’s open market operations announcement. Demand was strong being the first part of the new 2-week reporting period. However, liquidity in the banking system continued to remain ample and helped keep the call rates in check. “Supplies were good and hence call rates did not rise sharply despite the amount received in repo bids,” a primary dealer said. The Reserve Bank of India drained Rs 7,500 crore in two bids via its repo auction on Friday. Most of the transactions were done in the region of 6.90-7.05 per cent and with stray deals being struck around 7.15 per cent. Opening the day at 6.90-7.05%, the call rate closed at 7.00-7.05%. According to market players call has been ruling easy despite strong demand mainly due to ample liquidity. Elsewhere, the NSE pegged its overnight Mibid and Mibor at 6.92% and 7.03% respectively.
FORECAST: Call rates slightly above 7% Saturday.

Spot Dollar
The rupee ended little changed as due inter-bank long liquidation after a large state-run bank lowered its bid for the dollar. Banks also unwound positions due to weak corporate demand. The rupee had recovered in early trade on demand from a few state-run banks. Most foreign banks were on the offer side selling on behalf of exporters. “There was periodic demand for the dollar,” a dealer said. According to dealers the rupee has been ruling in tight range amid lack of major market moving factors. The rupee may continue to trade in narrow range Monday. Opening the day at 47.1375, the rupee eased to close at 47.1350. In intra-day high for the rupee was 47.1550 while the intra-day low was 47.1375. Meanwhile, the RBI fixed its reference rate for the dollar at 47.15 as against its previous fix 47.14. In cross currency trades, the euro closed at 43.09, while the pound-sterling closed at 68.51.
FORECAST: The rupee seen rangebound on Monday.

Forward Premiums
Forward dollar premia opened higher tracking weak spot and remained range-bound for most of Monday. A firm inter-bank call rate also kept premiums firm in early trade. Premiums remained range-bound after the call rate eased in late trade. However, they remained in a narrow range for the most of Friday tracking the spot rupee. Premiums did not see much movement throughout the day. Ample near-term liquidity and relatively easy call rates kept premiums in a very tight range. The benchmark six-month annualised premium closed at 4.55% while the annualised one-year premium also closed at 4.75%. Cash/tom traded at 1.80/1.85 paise while cash/spot traded at 1.80/1.85 paise. In month-wise premiums, September dollar traded at 12/12.25 paise, while in the far forwards, January dollar traded at 86/87 paise with July dollar at 201/203 paise.
FORECAST: Forward premiums slightly firm Monday.

Gilts
Government securities eased a bit Friday due to profit-sales in early trade. However, trade was choppy Friday with profit-sales and bargain buying taking turns. “Gilt prices eased in early trade on rumours on the political front and also after RBI’s OMO announcement,” a dealer at a broking firm said. “Basically most traders were booking profits at the higher levels,” he said. Prices however continued to remain range-bound as market players were comfortable with the near-term liquidity in the banking system. In top securities, the 11.03% 2012 paper was seen at Rs 115.75. On the NSE’s wholesale debt segment, trades worth Rs 2,861 crore were seen. Trades worth Rs 231 crore were seen in the 9.81% 2013, while those in 11.50% 2011A paper and 11.03% 2012 amounted to Rs 205 crore and Rs 425 crore respectively.
FORECAST: Prices seen range-bound Saturday.

(Compiled by Srikesh Menon)