Call rates ruled easy on Tuesday. Overnight rates opened at 8.10 per cent compared with their previous close of 7-7.25 per cent. There was no upward pressure on the rates owing to lack of demand for funds. "Banks are not borrowing from the call market as the system is flush with liquidity," dealers said. The total outstanding in repos is to the tune of Rs 4,000 crore. The total outflow from the system through the RBI repos was Rs 357 crore while the inflow was Rs 1,725 crore. Call rates closed at 8.05 per cent. Call rates are expected to rule easy between 8 per cent and 8.75 per cent throughout the week owing to an inflow of around Rs 2,500 crore from treasury bills redemptions and coupon payments, dealers said. The NSE's overnight Mibid and Mibor quoted at 8 and 8.08 per cent and 14-day Mibid and Mibor quoted at 8.41 and 9.04 per cent.

FORECAST: Call rates are seen at 8-8.25 per cent on Wednesday.

Spot Dollar

The spot rupee remained subdued on Tuesday owing to alacklustre demand for dollars. The Indian currency opened at 42.42/44 against the dollar, unchanged from its previous close. Later, the rupee weakened to an intra-day low of 42.44/45 owing to a little corporate demand for dollars. "A few foreign banks were seen buying on behalf of corporates which weakened the Indian currency," dealers said. The rupee strengthened by 3 paise towards the close to 42.41/42 owing to some dollar-selling. The rupee finally closed at this level. "The rupee is expected to rule steady during the week," dealers said. The RBI's reference rate for the dollar was Rs 42.43 (Rs 42.38).

FORECAST: The rupee is seen at 42.30-42.45 on Wednesday.

Forward Premiums

Forward premiums opened at their previous closing levels on Tuesday. Forwards rose by 2-3 paise when the spot rupee weakened and fell by 2 paise when the currency appreciated towards the close. Premiums closed 1-3 paise lower than their previous closing levels. The six-month annualised cover closed at 7.5 per cent,three months at 5.9 per cent and one month at 4.5 per cent. The November premium quoted at 1-2 paise (1-4 paise), December at 16-18 paise (17-19 paise), January at 38-42 paise (39-42 paise), February at 65-69 paise (65-69 paise), March at 98-103 paise (101-104 paise), April at 130-135 paise (132-136 paise), May at 161-164 paise (164-167 paise), June at 194-198 paise (195-199 paise), July at 224-229 paise (226-231 paise), August at 254-259 paise (257-262 paise), September at 285-290 paise (287-292 paise) and October at 315-321 paise (317-322 paise).

FORECAST: The six-month annualised cover is seen at 7.4-7.6 per cent on Wednesday.

Gilts

Prices of short-dated government securities remained stable on Tuesday owing to little demand for funds. "The marginal supply in short-dated papers is met by the existing demand," dealers said. Trades were seen only in the 14- and 91-day treasury bills and a short-term paper maturing in 1999-2001, dealers said. The 11.55 per cent 2001 paper traded at Rs100.08, the zero coupon 1999 paper at Rs 98.63 and the 11.40 per cent 2000 paper at Rs 100.11. The wholesale debt market of the NSE witnessed trades worth Rs 440.95 crore. The 11.40 per cent government loan maturing in 2000 traded worth Rs 60 crore at a weighted yield of 11.32 per cent. The 364-day treasury bill maturing on November 19, 1999, traded worth Rs 80 crore at a weighted yield of 10.49 per cent.

FORECAST: Gilt prices are seen stable on Wednesday.