Call money

The call rate eased to 1.25-1.50 per cent on Thursday after lenders lowered rates to woo borrowers, dealers said.

``The market was flush with funds but there were hardly any takers,'' said a dealer at a lending bank.

The call rate opened at 1.75-2.25 per cent and soon fell to 1.25 levels on ample supplies, dealers said.

Most deals were done between 1.25 and 1.75 per cent, they said. The call rate ended at 1.25-1.50 per cent. The call rate on Wednesday closed at 2.25-2.50 per cent compared with the day's opening range of 2.75-3.25 per cent.

The rate is expected to move in a similar band on Friday. A few dealers said the rate could dip below one per cent levels.

FORECAST: Call rate seen between 1 and 2 per cent on Friday, may dip below one per cent levels in late trades.

Spot Dollar

The rupee appreciated against the dollar as Reserve Bank of India showed no signs of supporting the dollar which prompted exporters to sell the US currency, dealers said. ``The dollar broke the Rs 35.75-barrier and appreciated to 35.74,'' a dealer at a private-owned bank said. The market had anticipated RBI to not let the dollar depreciate beyond Rs 35.75.

Opening at 35.77-35.78 to a dollar, the rupee firmed marginally to 35.76 by afternoon, they said. The rupee appreciated sharply to 35.74 levels in late afternoon trades after a few foreign-owned banks sold dollars heavily, a dealer at a private-owned bank said. The rupee ended at 35.7400-35.7450 to a dollar compared with the previous day's closing of 35.7550-35.7625. The rupee is seen appreciating further if there is no intervention by the RBI on Friday, dealers said.FORECAST: Rupee may appreciate further if there is no intervention by the RBI on Friday.

Forward premia

Premiums on the dollar for future deliveries firmed marginally after a few importers bought dollars for deliveries starting October through December, dealers Thursday said.

The purchases pushed up the six-month dollar premiums to 3.65 per cent over the spot rate at close from the opening level of 3.55 per cent. A few banks also bought far-forward dollars like May and June deliveries, dealers said. ``The premiums rose between 1 and 3 paise,'' a dealer at a foreign-owned bank said. There was no intervention by the Reserve Bank of India today, he added. State Bank of India, was not very active in the forward market but the bank bought spot dollars, a dealer said. ``State Bank of India lowered the bid rate on the spot dollar which indicated that it bought a few dollars in spot today,'' he added. The premiums are expected to be steady to firm on Friday if the buying continues, dealers said.

FORECAST: Premiums seen steady to firm on Friday.

Gilts

Prices in the government bonds fell in late afternoon trades after appreciating in early trading on Thursday, dealers said.

The fall in prices were more prominent in the five to seven year maturing bonds, they said. The prices dipped because the Reserve Bank of India today said it will auction six-year bonds totalling Rs 3,000 crore on Wednesday.The announcement caused some panic in the bond market and buyers immediately lowered their offer quotes on the NSE, a dealer at a brokerage said.

The 12.59-per cent bonds, 2004 was most affected by the RBI announcement. Prices in these bonds fell from the day's high of Rs 101.47 to Rs 101.30 no sooner the RBI announced the auction late afternoon. Dealers are expecting the prices to firm up on Friday. The fall in prices today were more out of panic than fundamentals, they said. FORECAST: Bond prices expected to rise on Friday.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.