Call MoneyÎThe overnight call money rate opened in the region of 10.65-10.75 per cent on Friday as against Thursday's close of 10.50-10.75 per cent.
The rate eased in the afternoon and closed at 8.75-9.00 per cent. Most deals were struck at 10.25-10.50 per cent. "Not much activity was seen in the call market on Friday," said a dealer from a private sector bank.
Some lenders were present in the morning session, but by late afternoon trading activities came to a standstill as there were few borrowers in the market, dealers said. The Reuter Mumbai interbank overnight average rate, a weighted average of traded rates from 16 institutions and banks, was 10.62 per cent.
FORECAST: The overnight call money rate is likely to open at a lower level on Saturday.
Spot Dollar
The rupee remained rangebound on Friday after opening at 38.73/75 against the dollar, unchanged over Thursday's close. Dealers said that exporters sold dollars which saw the rupee appreciate steadily against the dollar.
Lack of importers also helped the rupee rally, dealers said. The Indian unit appreciated all the way to 38.60/65 before the State Bank of India came into the market and bought dollars on behalf of its corporate clients, which saw the rupee weaken to 38.78. But it recovered on steady selling to close at 38.66/70 -- a three paise gain over Thursday's close.
The Reserve Bank of India was not present in the spot market, although dealers said that the central bank had intervened in the forward market. Dealers said that the sentiment on the rupee was turning bullish as the currency was stabilising.
FORECAST: The rupee is expected to rule between 38.50 and 38.80.
Forward Premiums
The premium continued to fall and for the first time in the past one month, one-month forward premia turned cheaper than six-month forwards. However though the forward curve is still inverse, dealers said that a correction is taking place. While one-month forwards closed at 15.5 per cent, six-month forwards (annualised)closed at 16.5 per cent.
However, one-year forwards remained the cheapest at 14 per cent. Dealers attributed the fall in the one-year forwards to the easy call money market conditions. Although the Reserve Bank of India wants to send a signal that it wants to keep liquidity at a premium by conducting sell/buy swaps, the market is liquid and the premia continues to fall. Dealers also added that the three-month premia were higher than six-month premia on account of paying pressure only in one month and six months.
FORECAST: Forwards are likely to fall further in line with the call rates.
Gilts
Not much activity was seen in the government securities market on Friday, except in treasury bills. "T-bills maturing in April were traded in the region of 14 to 15 per cent," said a dealer from a private bank.
Most dealers said that no selling pressure was felt in the securities market. The securities market is likely to remain inactive for at least few weeks, dealers said.
The wholesale debt marketsegment of the National Stock Exchange witnessed trades worth Rs 208.11 crore. The 13.50 per cent government stock maturing in 1998ÿwas traded for Rs 35 crore at a weighted yield of 13.50 per cent.
The 12.59 per cent government loan maturing in 2004 was traded at a weighted yield of 12.56 per cent. The 364-days treasury bill maturing on April 24, 1998, was traded for Rs 55 crore at a weighted yield of 13.34 per cent. Repoÿdeals worth Rs 40 crore were traded on Friday.
FORECAST: Securities' prices are likely to rule at the same level on Monday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
