Call money rates recorded an intra-day high of 9.30-9.40 per cent on Monday, slightly higher than the previous closing level of 9-9.15 per cent. The overnight rates opened at 9.30-9.40 per cent owing to lack of funds in the system to meet the existing demand. The rates eased marginally at noon due to clearance of some high value cheques. The rates finally closed lower at 8.90-9 per cent as against the previous closing level of 9.10-9.15 per cent.

The Reserve Bank of India mopped up Rs 2,000 crore through its fixed rate repo in government of India dated securities for parties holding SGL and current account compared with the previous mopup of Rs 123 crore. The interest rate was pegged at 8 per cent. The inflow into the system through reverse repo was Rs 1,000 crore. According to dealers, the rates are expected to ease during the week as some inflows are expected to come into the system through coupon payment on securities. On February 25, Rs 475 crore is expected to come into the system through coupon payment on 11.75 per cent 2001 paper.

FORECAST: Call rates are expected to rule between 8.80-9.20 per cent on Tuesday.

Spot Dollar

The rupee strengthened by two paise on Monday to an intra-day high of 42.39/40 as against the previous high of 42.41/42 against dollar. The Indian currency opened at 42.40/41, unchanged from its previous close. During the day, the Indian currency strengthened to 42.39/40 against dollar due to selling by banks on behalf of corporates. However, at noon, the Indian currency weakened by two paise to finally close at 42.41/42 against dollar, unchanged from the opening level.

Cash/spot closed at 2/2.25 paise with cash/tom at 1.50/2 paise. The RBI reference rate for US dollar was Rs 42.40 on Monday as against the previous peg of Rs 42.44. Meanwhile, Indian currency strengthened against euro. The Indian currency opened at 46.93 against euro against the previous opening level of 47.48, recorded a high of 46.95 against the single European currency to finally close lower at 46.50 against euro.

FORECAST: Rupee seen between 42.42 and 42.50 on Tuesday.

Forward Premiums

Forward premiums across all maturities firmed up by 3-5 paise towards the opening owing to paying interest by corporates. However, some receiving by corporates at noon eased the premium by 2-3 paise. According to dealers, marginally high paying interest was seen by corporates in 1-3 months forwards.

The six month premium closed at 7.21 per cent, three months at 7.1 per cent and one month at 5.7 per cent. The March premium closed at 24-26 paise (25-28 paise), April at 54-56 paise (53-56 paise), May at 76-78 paise (76-79 paise), June at 103-105 paise (105-107 paise), July at 127-131 paise (131-133 paise), August at 155-158 paise (158-160 paise), September at 183-186 paise (187-189 paise), October at 210-215 paise (216-219 paise), November at 239-241 paise (245-248 paise) and December at 269-273 paise (275-278 paise).

FORECAST: Six-month annualised premium seen between 6.8-7.5 per cent levels on Tuesday.

Gilts

Short and medium term gilts prices ruled rangebound on Monday. The 11.40 per cent 2000 was traded at Rs 100.24 (Rs 100.24) and 11.55 per cent 2001 at Rs 100.23 (Rs 100.23), 11.68 per cent 2002 paper at Rs 100.14, zero coupon 2000 paper maturing on July 13 at 86.01, 12.50 per cent 2004 paper at Rs 102.22 and 91-day T-Bill maturing on May 22, 1999 at 9.33 per cent.

The wholesale debt market of National Stock Exchange (NSE) witnessed trades worth Rs 231.30 crore as against the previous day's peg of Rs 192.68 crore. The 12.50 per cent government loan maturing in 2004 was actively traded worth Rs 75 crore at a weighted yield of 11.91 per cent. The 11.98 per cent government loan maturing in 2004 was traded worth Rs 45 crore at a weighted yield of 11.93 per cent. The 12 per cent government loan maturing in 1999 was traded worth Rs 23 crore at 10.46 per cent.

FORECAST: Gilts prices are expected to rule steady on Tuesday.