Call Rate

The interbank call rate on Tuesday remained unchanged from the previous day's narrow range of 1.00-1.75 per cent, dealers said. The call rate ended at 1.0-1.25 per cent, slightly lower from the previous day's close of 1.0-1.5 per cent, they said. The rate is expected to move in a similar range on Wednesday.

Most deals today were concluded between 1.0-1.5 per cent, dealers said. Transactions at the day's highest level of 1.75 per cent were few and scattered, they said.

The call rate is expected to firm up on Thursday, a dealer at a private-owned bank said. This is because the Reserve Bank of India will auction six-year government bonds worth Rs 3,000 crore on Wednesday. The payment, by successful bidders, will be on Thursday and is likely to push up the call rate on that day.

FORECAST: Call rate expected to remain easy on Wednesday, may move in a similar range.

Spot Dollar

The RBI intervened in the spot dollar market after the rupee firmed to Rs 35.6850 to a dollar in late afternoon trades, dealers said on Wednesday. Opening at 35.7150-35.7250 per dollar, the rupee remained stagnant till noon due to lack of demand for the US currency, dealers said. However, State Bank of India's entry late afternoon saw the rupee firming against the dollar.

The bank sold the US currency causing the rupee to strengthen to 35.6850-35.6950 to a dollar. The RBI stepped in when the dollar dipped below Rs 35.70. The RBI's dollar purchases weakened the rupee to 35.70-35.71 which was also the day's closing level. The RBI's intervention was to the tune of $50-100 million, dealers said. The dollar is expected to hover around 35.70-35.71 levels on Wednesday. Dealers expect the RBI to continue its support for the US currency if it dips below Rs 35.70.

FORECAST: Rupee expected to hover around Rs 35.70-35.71 per dollar on Wednesday.

Forward Premia

Premiums on the dollar on Wednesday remained steady at the previous day's traded range, dealers said. The steady trend was mainly due to lack of any trading interest, they said. ``The little genuine demand was met by adequate supplies,'' a dealer at a foreign-owned bank said. Importers largely stayed away as they prefer buying in spot and rolling over, said a dealer at a brokerage.

Six-month dollar premium moved in a similar band as seen on Monday. ``The premiums were steady at Monday's level of 3.63-3.61 per cent,'' said a dealer at a private-owned bank. Dealers expect the premiums to remain steady around the present levels. Six-month dollars are seen at the current levels atleast till the end of this week, dealers said.

FORECAST: Premiums seen at the current levels on Wednesday.

Gilts

The government security market continued to remain buoyant with easy liquidity conditions making cash-rich banks opt for bond investments, dealers said on Tuesday. Yields continued to rise across-the-board despite a six year bond auction on Wednesday, dealers said. Most are expecting the Reserve Bank of India to maintain a coupon of around 11.85-11.95 per cent at the auction. The secondary market yield on a similar tenure paper is currently hovering around 11.80-11.85 per cent.

The auction is expected to be fully subscribed to its notified amount of Rs 3,000 crore, dealers said.

Meanwhile, in the bond trading today, the most sought-after 12.59-per cent bonds, 2004 were up at Rs 102.55 compared with the previous day's traded high of Rs 102.27. Volumes at the NSE were up at Rs 652 crore compared with the previous day's traded level of Rs 542 crore.

FORECAST: Prices expected to rise further on Wednesday.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.