Call rates opened at 11.5-12 per cent on Friday marginally higher compared with the previous close of 11-11.5 per cent. During the day, the rates ruled above the 11.5 per cent to finally settle at 10.75-11.20 per cent towards the close. Money market dealers said, call rates opened firm as the market expected liquidity to be easier during the day. "Most of the deals were struck at 11.5 per cent," a dealer at a private bank said."We expect liquidity to be tight over the next week as advance tax outflows will drain out around Rs 7,000 crore from the system. "The funds collected as advance tax payments are still available to the system so liquidity is still there," said a dealer from a private bank. Market does not expect the liquidity crunch to be acute since the outflow would take place in a staggered manner. The Mibor quoted at 11.47 per cent as against 12.54 per cent on Thursday. According to dealers, most banks and primary dealers have availed additional refinance from the RBI at 10%.

FORECAST: The overnight call rates are expected to rule between 10.5 to 11 per cent on Saturday.

SPOT DOLLAR

The Indian rupee opened little changed from its previous close on Friday. According to dealers, early trading was quiet amid mild dollar bids from banks. The rupee opened at 43.535/545 against dollar compared with their previous close of 43.54/5425. During the day it went to an intra day low of 43.55 against the dollar. According to forex dealers, while sentiment was in favour of dollar bids, the market was cautious. "The market is cautious. Nobody wants to go long and have the RBI trigger their stop losses," a dealer at a foreign bank said. "State Bank of India (SBI) and other banks bought dollars at 43.54 levels in morning trade but were sellers at the same level later in the day," dealers said. Dollar supplies were thin as foreign funds flows had slowed down on account of the elections. The Indian currency closed at 43.53 against the dollar.

Forecast: Rupee isexpected to open at Friday's closing levels.

FORWARD PREMIUMS

Forward premiums firmed up marginally in the morning on account of weak spot rupee. "Slight paying was seen in the morning however towards the close the premiums eased to their previous closing levels as call rates also dipped to 10.75 per cent level. Some receiving was seen in the later half of the day by a few state run banks," dealers said. The six-month premium quoted at an annualised 5.38 per cent against the previous close of 5.44 per cent. Three months premium quoted at 5.25 per cent and one month at 5.25 per cent. September premium closed at 5.5-6 per cent, October at 23-25 per cent, November at 42-44 per cent, January at 83-86 per cent, February at 102-105 per cent, March at 122-125 per cent, April at 143-146 per cent, May at 163-166 per cent, July at 203-206 per cent and August at 223-226 per cent.

Forecast: Forward premiums are expected to ease marginally onMonday.

GILTS

Government securities marketwitnessed bullish sentiments on Friday as the overnight call rates moved in a narrow band of 10.50-12 per cent during the day. "Gilts prices rose by 5 to 10 paise across all maturities as rates ruled easy," said money market dealers. According to market dealers due to tight liquidity in the system on account of advance tax outflow, the market was expecting call rates to touch 20 per cent level. The 11.99 per cent 2009 paper dealt at Rs 102.35 as against the morning level of Rs 102.25, 12.40 per cent gilt maturing in 2013 at 103.36 (Rs 103.27). Market players should built up positions at the longer end with a medium term view as gilts prices as the longer end are expected to ease during the current reporting fortnight. "Market players should concentrate their portfolio at the shorter ends to book profit when liquidity eases," dealers said.

Forecast: Gilts prices are expected to rule at the existing level on Saturday.

-- Compiled by Pratibha Rathore