November 7: The interbank call rate on Friday opened at 6-7 per cent compared with the previous day's close of 9.00-9.25 per cent, dealers said. The rate fell towards the close and ended at 3-4 per cent, they said. The rate had touched an intraday's high of 7.5 per cent, but deals at that level were few and scattered. The interbank rate softened because today is the reporting day for banks to meet reserve obligations with the Reserve Bank of India. Dealers said banks had covered most of the requirements on Thursday itself in view of the reporting day. ``They did not postpone their cash requirements for today as they did not want to take any risk in fulfilling RBI's reserve obligations,'' said a dealer at a private-owned bank.The rate is expected to move in a 6-8 per cent band on Saturday, the first day of the new reporting fortnight.

FORECAST: Call rate seen in a 6-8 per cent band on Saturday.

Spot Dollar: The rupee, on Friday, weakened sharply against the US currency on heavy speculative trading, dealers said.

Opening weaker at 36.4750-36.4950 to a dollar compared with the previous closing of 36.4450-36.4550, the rupee received a further setback on speculative talks that the dollar will become dearer after state-owned Gas Authority of India recently scrapped its plans to raise $750 million via the global depository receipts.

Market players said they expect other companies to postpone their issues and this would restrict dollar supplies in the domestic market.

The rupee touched an intraday low of 36.57 per dollar and ended lower at 36.52-36.54 on some profit-taking by speculators.

The RBI did not intervene today but kept checking the rates periodically.

FORECAST: Dollar seen firmer on Monday.

Forward Premia: Premiums on the dollar opened firmer and moved in tandem with the trend in the spot dollar market, dealers said on Friday.

Six month dollar premiums opened at an annualised 7.20 per cent over the spot dollar and touched an intraday peak of 7.3 per cent, dealers said. ``There was good demand for forward dollars as importers stepped in fearing a further rise in premiums,'' said a dealer at a brokerage.The premiums dipped from its day high as market leader, State Bank of India, sold forwards, dealers said.

The bank sold February and March deliveries, they said. The selling by SBI as well as exporters who took profits caused a fall in the premiums across the board.

The six month dollar ended at an annualised rate of 7.25 per cent over the spot rate. On Thursday, six month dollars ended at 7.1 per cent.

FORECAST: Premiums seen in a firmer on Monday, six month premium may move in a 7.25-7.50 per cent band.

Gilts: The reporting Friday prompted many banks to sell government securities in a bid to raise funds to fulfill reserve obligations with the Reserve Bank of India, dealers said.

The selling were at higher yields to woo big investors like financial institutions and a few government-owned banks, they said. The yields in some of the bonds rose towards the end of the day as sellers became desperate to raise funds, dealers said.Dealers said cash-rich banks began to take trading positions afresh in medium and long term bonds on expectation that the interbank rates will be easier in the new fortnight beginning on Saturday.

Trades worth Rs 155 crore were transacted in this bond at prices ranging between Rs 108.95 and Rs 109.05. The prices of these bonds fell from Thursday traded range of Rs 109.05 and Rs 109.25.

FORECAST: Trading interest seen in medium and long dated bonds, prices may rise on Saturday.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.