Dull trades were seen in the call market on Thursday. Opening the day at 8-8.10 per cent from its overnight close at 7.98-8 per cent, call rates ruled at these levels for most of the day ahead of reporting Friday. "Demand for funds was good ahead on Reporting Friday's eve, but liquidity was equally strong due to interest payments", a dealer with a European bank said. Inflows included Rs 474.26 crore by way of interest payments on the 11.75 per cent 2001 on 25 August and Rs 138.5 on the 13.85 per cent 2006 today. "All eyes are on the auction of the the 11.99 per cent for Rs 2,500 crore on Friday. It appears as if the auction will sail through", a dealer with a Gulf-based bank said. At close of trades, call rates were seen at 7.95-8.05 per cent. The National Stock Exchange pegged its overnight Mibid and Mibor at 7.97 per cent (7.97 per cent) and 8.43 per cent (8.05 per cent) with the fortnightly one at 8.43 per cent (8.67 per cent) and 9.06 per cent (9.31 per cent).

FORECAST: Callrates seen at 7.95-8.05 per cent levels on Friday.

Spot Dollar

The rupee held firm against the dollar on Thursday at 43.5275/54 levels. Opening the day at 43.53/54, lower from its overnight close at 43.51/52, the rupee held the same level in fore-noon trades. "The rupee recovered shortly before noon due to some corporates dollar selling pressure to 43.51/52", dealers said. The rupee has been steady after Reserve Bank governor, Bimal Jalan's statement on Monday that the Reserve Bank was ready to meet any eventuality on the rupee-front. At close of trades, the rupee was seen at 43.51/52. Cash/spot quoted unchanged at 0.25/0.3750 paise (0.50/1 paise), cash/tom at 1.75/2 paise (0.25/0.50 paise) with tom/spot at 1.25/1.50 paise (0.350/0.50 paise). The Reserve Bank maintained its reference rate for the dollar at 43.52 as against it previous 43.52. The euro opened at 45.31 (45.75) against the rupee, went to a high of 45.55 (45.90) before closing at 45.40 (45.31).

FORECAST: Rupee seen between43.5150-43.5250 levels on Friday.

Forward Premiums

Trades in the forwards were dull on Thursday. The six-month annualised forward cover finished a shade higher at 4.78 per cent (4.80 per cent). January dollars quoted unchanged at 91/93 per cent with February at 106/108 paise (105/108 paise). "Trades are dull given a firm spot rupee. Reserve Bank governor, Bimal Jalan's statement on Monday has affected trades", a dealer with a Gulf-based bank said, adding: "Outflows on account of Reserve Bank of India's decision to re-issue the 11.99 per cent 2009 for Rs 2,500 crore on Friday may seen premiums go a shade higher. If call rates firm ahead of the general elections, premiums may go higher".

FORECAST: Six-month annualised forward cover at 4.75 per cent on Friday.

Gilts

Bond prices held firm on Thursday. The 12.50 per cent 2004 was dealt at Rs 105.41 levels (Rs 105.40) with the the 11.50 per cent 2004 at Rs 101.95-101.96 (101.95 levels). "Trades were dull ahead of Reserve Bank'sauction of the 11.99 per cent 2009 for Rs 2,500 crore on Friday", a dealer with a primary dealership said. Inflows of Rs 474.26 crore by way of interest payments on the 11.75 per cent 2001 on 25 August and Rs 138.5 on the 13.85 per cent 2006 today and moderate demand for funds had seen call rates hover between 8 per cent and 8.05 per cent levels today. "All eyes are now on the auction ahead", a bond dealer with a US-based bank said. The Reserve Bank decision to re-issue the 11.99 per cent 2009 had led to a downward correction in bond prices.

FORECAST: Bond prices seen a shade lower on Friday.

(Compiled by Raghu Mohan)