Call Money
Call rates closed at around 6.55-6.65%, above its notional floor of 6.50%, on Monday. Opening the day higher at 6.60-80%, call rates were range-bound and traded in a thin range between 6.50% and 6.70%. There was ample liquidity in the system to meet the demand of borrowing banks in the early part of the reporting period. In the morning session, most of the trades were done at around 6.60-6.70%, while in the afternoon deals, after the Reserve Bank of India (RBI) announced the repo auction results, most deals struck around 6.50-6.55%. The RBI accepted three bids at its one-day repos-auction for Rs 9,735 crore, which indicates good liquidity position. The RBI did not receive any applications at its reverse-repo auction. It did not receive any applications at its 12-day repo auction either. Meanwhile, the National Stock Exchange (NSE) pegged its overnight Mibid and Mibor at 6.57% and 6.695 respectively.
FORECAST: Call rates seen at around 6.50-6.75% on Tuesday.

Spot Dollar
The rupee closed 47.9425/95 against the dollar on Monday. Opening the day higher at 47.94/95 from Thursday’s close of 47.9475/9525, the rupee remained range-bound throughout the day. The rupee resumed the week’s trading on a positive note backed by dollar supplies accumulated over the long weekend. The forex market was closed last Friday on account of”Guru Nanak Jayanti”. The rupee was quoted at 47.93/94 in late morning deals. The intra-day high was seen at 47.9175/92 while the intra-day low at 47.9425/95.
“Despite the downdrading of India’s foreign currency ratings by global credit rating agency (Moody’s), the rupee got underlying support from bunched-up dollar supplies accumulated over long weekend.”, a dealer with a forex dealership said. Meanwhile, the RBI fixed its reference rate for dollar at 47.93 as against its previous fix of 47.99. In cross-currency trades, the euro closed at 42.84 with the pound closing at 68.19/21.
FORECAST: The rupee seen rangebound on Tuesday

Forward Premiums
Forward dollar premium held steady owing to easy call rates. Overall trade remained easy on the back of easy call and firm rupee. The six-month and one-year annualised premia closed at 6.30% and 6.10% respectively. Call rates have been easy owing to ample liquidity in the banking system. Long-tenor premiums are seen range-bound owing to easy call rates. The rupee closed at 47.9425/95 against the dollar on Monday.
Also, US interest are expected to reverse its low trend in the near-future reducing the interest rate differential between US and India, this will help premiums ease further.
In month-wise premiums, December dollar traded at 17.5/18 paise, while in the far forwards, April dollar traded at 120/121 paise with November dollar at 284/285 paise.
FORECAST: Forward premiums seen range-bound on Tuesday.

Gilts
Government securities prices rose in the late evening session after the announcement of twin-bond auctions for a cumulative Rs 6,000 crore. Prices rose around 20 paise on an average. Bond prices opened slightly lower as compared to the previous close following the statement of Yaswant Sinha about the economic condition. The RBI announced two auctions: one floating rate bond for 2009 paper for Rs 3,000 crore and 10.71% 2016 paper for Rs 3,000 crore. The 10-year benchmark yield was around 7.85%. “The yield came down after the announcement of the auctions”, a dealer said. The NSE’s wholesale debt market saw a trading volume of Rs 2,691.06 crore. Trades worth Rs 540 crore were seen at the 9.85% 2015 paper, while the 11.03% 2012 and 9.81% 2013 papers amounted to Rs 330 crore and Rs 225 crore respectively.
FORECAST: Prices seen range-bound on Monday.

— Compiled by Atmadip Ray