Call rates ruled easy on Thursday owing to comfortable liquidity in the system and lacklustre demand for funds ahead of the reporting Friday on January 29. Overnight rates opened at 8.15-8.20 per cent compared with their previous close of 8.20-8.30 per cent. "Lack of demand for funds saw the rates rule at 8.15-8.20 per cent throughout the day," dealers said. Call rates finally closed unchanged from their opening level of 8.15-8.20 per cent. The total outflow from the system through three-day 8 per cent fixed-rate repos was Rs 50 crore. Meanwhile, Rs 2,000 crore came into the system through the Reserve Bank of India reverse repos. According to dealers, call rates are expected to rule easy throughout the week owing to surplus liquidity in the system.

FORECAST: Call rates are seen at 7.75-8.25 per cent on Friday.

Spot Dollar

The rupee remained rangebound against the dollar on Thursday. Lacklustre trading saw the Indian currency rule in a narrow 2 paise band. The rupeestrengthened by 1 paise at the opening to 42.50 compared with its previous opening level of 42.50/51. Throughout the day, lack of any inflow or outflow of dollars kept the rupee stable. In the afternoon, marginal selling by exporters strengthened the rupee by 1 paise. The rupee finally closed at 42.49. The Reserve Bank of India pegged its reference rate for the dollar at Rs 42.50 compared with its previous fix of Rs 42.49.

The rupee opened at 48.52 against the euro, touched a high of 48.83 and finally closed lower at 48.50.

FORECAST: The rupee is seen at 42.45-42.52 on Friday.

Forward Premiums

Forward premiums softened by 2-3 paise across all maturities on Thursday owing to marginally high receiving by corporates. "At the existing levels, importers are not interested in paying," dealers said. Six-month annualised closed at 6.72 per cent (6.95 per cent), three months at 6.58 per cent and one month at 4.53 per cent. Feburary premium closed at 16-18 paise (18-20 paise), March at 38-40 paise(43-45 paise), April at 68-70 paise (73-75 paise), May at 89-91 paise (93-96 paise), June at 114-117 paise (118-121 paise), July at 142-144 paise (147-150 paise), August at 168-173 paise (178-182 paise), September at 195-197 paise, October at 221-224 paise, November at 251-254 paise and December at 281-284 paise.

FORECAST: Six-month annualised premium is seen at 6.70-6.80 per cent on Friday.

Gilts

Easy call rates and the new price list issued by the Reserve Bank of India, which fixed 11.98 per cent 2004 paper at a high Rs 100.25 (Rs 100.05) on Thursday, saw 3-5 paise improvement in short and medium gilt prices. "A lot of selling interest was seen in short-term gilts," dealers said. 11.40 per cent 2000 paper traded at Rs 100.28, 11.55 per cent 2001 paper at Rs 100.28, 11.64 per cent 2000 paper at Rs 100.70, 11.75 per cent 2001 paper at Rs 100.69 and 11 per cent 2002 paper at Rs 98.52. The debt market of the NSE witnessed trades worth Rs 590.83 crore. 11.40 per cent government loan tradedworth Rs 60 crore. 12 per cent paper maturing in 1999 traded worth Rs 53 crore.

FORECAST: Gilt prices are seen up by 1-2 paise on Friday.