Call MoneyThe overnight call money rate opened in the region of 10.50-12 per cent on Wednesday, a little higher than Tuesday's close of 10.00-10.25 per cent. It moved up further in the morning session. However, it fell in the afternoon to close at around 10.00-10.50 per cent.
Most deals were struck in the region of 10.00-10.75 per cent. Some stray deals were also done at 11 per cent. "Not much demand was seen in the market on Wednesday," a dealer said.
Lenders seen in the market included UTI, SBI, LIC, GIC and some banks. Dealers expect the market to pick up after a day or two.
FORECAST: The overnight call money rate is likely to open at around at 11.00 to 13.00 per cent on Thursday.
Spot Dollar
The spot rupee was volatile on Wednesday as the State Bank of India (SBI) continued to buy as well as sell dollars. Opening at 38.71/75--unchanged from Tuesday's close--the rupee weakened to 38.77/78 in early morning trade.
But just as the rupee was about to breach the 38.80 level,the SBI bagan to sell dollars on behalf of the Reserve Bank of India.
This saw the rupee appreciate to 38.60/62 level where it stayed for sometime. But sustained demand from corporates saw the rupee losing ground once again and trade at 38.68/70. "At this level, the SBI bought dollars on behalf of its corporate clients," a dealer in a private sector bank said.
This saw the rupee once again touch a low of 38.80 before recovering to close at 38.70.
FORECAST: The rupee is expected to trade at 38.60 and 38.70 on Thursday with RBI likely to intervene if it breaches 38.80.
Forward premiums
Forwards firmed up on Wednesday in line with the overnight call rates which closed at 15 per cent. The Reserve Bank of India (RBI) intervened in the forward market by entering into swap deals for May and June deliveries.
Dealers said that the RBI and the State Bank of India once again entered into a swap deal on Wednesday as a result of which the RBI was seen paying which saw differences climb.However, during the day the SBI received dollars which saw premia come down. Towards the close, paying pressure continued and they closed at levels higher than Tuesday. Six-month forwards (annualised) closed at 17.75 per cent--from 16.25 per cent on Tuesday -- while one-year forwards closed at 14.75 per cent--costlier by 50 basis points over yesterday. One-month forwards (annaulised) closed at 25 per cent and three-month dealers closed at 21 per cent.
FORECAST: Six-month forwards are expected to remain high.
Gilts
Not much activity was seen in the government securities market on Wednesday. "The government securities market was dead on Wednesday and no activity was seen either in government securities or T-bills," said a dealer from a private bank.
Most dealers said that no selling pressure was felt in the securities market. There were hardly any sellers in the market. "Even buyers are not inclined to buy securities as it is currently unpredictable," a dealer said.
The wholesale debtmarket segment of the NSE witnessed trades worth Rs 141.64 crore and repo deals worth Rs 30 crore were traded on Wednesday. The 13.82 per cent government loan maturing in 2002 was traded for Rs 10 crore at a weighted yield of 12.06 per cent. The 364-days treasury bill maturing on April 10, 1998, was traded for Rs 45 crore at a weighted yield of 15.12 per cent.
FORECAST: Securities prices are likely to rule at the same level at least for a week.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
