November 4: The interbank call rate opened at 7.75-8.25 per cent on Tuesday and ended firmer at 8.50-8.75 per cent on good demand, dealers said.

``Monday's firm trend continued and towards the close there were hardly any lenders,'' said a dealer at a private-owned bank. Most deals were concluded between 8.0 and 8.5 per cent. The intraday high was 8.75 per cent. A few dealers said that the rate had touched 9 per cent levels, but such deals could not be confirmed.

The call rate on Monday opened at 7.5-8.0 per cent but closed higher at 8.25-8.50 per cent.

The call rate is expected to move in a tight band of 8-9 per cent on Wednesday, dealers said.

``The demand for funds will continue and lenders will take advantage of that,'' said a dealer at a private-owned bank.

FORECAST: Call rate seen in a 8-9 per cent band on Wednesday.

Spot Dollar

The rupee on Tuesday opened at 36.37-36.38 to a dollar, unchanged from the previous day's close and firmed up later on some selling by exporters, dealers said.

The rupee ended slightly stronger from the opening at 36.36-36.37 per dollar after touching the day's high of 36.3550, they said.

The rupee moved in a narrow band of 36.36-36.39 per dollar despite a steady demand for the US currency, a dealer at a private-owned bank said.

In early trading there was some expectation that market leader, SBI, would continue its dollar purchases that began late last week. Exporters who held back dollars awaiting for SBI's entry began selling dollars when the bank showed no signs of buying dollars, dealers said.

``There was no big demand from SBI and exporters who held back dollars hoping to make a killing began selling,'' said a dealer at a brokerage.

FORECAST: Rupee seen in a similar range on Wednesday.

Forward Premia

Premiums on the dollar for future deliveries remained steady for most of the day, dealers said on Tuesday.Six-month dollars moved in a narrow band of 6.25-6.30 per cent over the spot rate.

Opening unchanged from the previous close of 6.25 per cent the six-month dollar deliveries edged up marginally at close to 6.30 per cent, dealers said.

Lack of interest continued to dominate the market as players stayed away, they said. ``There were no buying interest from corporates today,'' said a dealer at a private-owned bank.A few dealers were of the view that the activity could pick up on Wednesday.

They said large corporate players could enter the market and this could push up the premiums.

But most were of the view that the lacklustre trading could continue till the end of the week.

FORECAST: Premiums may move in a narrow range on Wednesday.

Gilts

The government security market remained dull in choppy trading, dealers said on Tuesday. Bond prices ended more or less at the opening levels after showing an intraday fluctuation of about 10 paise, they said.However, some improvement was seen in the number of trades that were transacted as compared with Monday's trades.

Volumes at the NSE was up at Rs 368.52 crore compared with the previous day's traded level of Rs 268.90 crore.Dealers said that the high interbank call rates prompted some selling interest in bonds but deals were few as buyers bargained for steeper discounts, a dealer at a brokerage said.

The trend is likely to continue on Wednesday as dealers expect the interbank rates to remain firm. Meanwhile, the RBI in a release on Tuesday said it will auction four-day repo of government securities on Thursday. The results will be announced the same day.

FORECAST: Prices expected to remain steady on Wednesday.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.