Forward Premiums Soften, Gilts Soar As War Fears Recede

Mumbai, May 24: | Updated: May 25 2002, 05:30am hrs
Receding war fears saw buoyancy returning to the inter-bank markets on Friday. Call rates and forward premiums softened and gilt prices soared to over by Rs 1.50 in intra-day trades. The 10-year yield curve softened to 7.75 per cent (7.90 per cent).

Call rates opened at 7-7.25 per cent, and eased to 6.40-6.60 per cent by close of trades. “Call rates opened firm as some banks rushed for funds in early trades ahead of the week-end, but eased on steady supply of funds by state-run banks”, a dealer said. Most of the deals were struck around seven per cent levels. The Reserve Bank of India (RBI) continued to reject major parts of the repos amount it received while accepting only a quarter of the amount on Friday. The RBI accepted Rs 1,500 crore at its three-day repos at six per cent out of Rs 6,000 crore it received.

Forward premiums eased with the six-month annualised forward cover quoting softer at 6.34 per cent from its overnight 6.78 per cent.