Call MoneyThe overnight call money rate opened in the region of 10.75-11.85 per cent on Thursday, higher than Wednesday's close of 10.00-10.50 per cent. It eased a little in the afternoon to close at around 10.50-10.75 per cent.
Most deals were struck in the region of 10.00-10.50 per cent. However, some stray deals were also conducted at 11 per cent, said a dealer from a private sector bank. "The demand was equal to the supply on Wednesday," a dealer said.
Big institutions were present in the market, but there were few borrowers barring some foreign banks. Dealers feel that the fall in the overnight call money rate is a temporary phenomenon and it will rise after a few weeks.
The Reuter Mumbai interbank overnight average rate, a weighted average of traded rates from 16 institutions and banks, was 10.98 per cent.
FORECAST: The overnight call money rate is likely to open at the same level on Friday.
Spot dollar
The spot rupee remained rangebound on Thursday and traded between38.75/80 for most part of the day.
Opening at 38.72/75, the rupee saw little action as there was little demand from importers. The rupee lost ground marginally during the mid-morning trade as the State Bank of India (SBI) entered the market to buy dollars on behalf of its corporate clients.
Dealers said that the SBI buying saw the rupee lose ground to trade at 38.79/80 against the dollar. But subsequent inflows from some exporters saw the rupee clawing its way back to trade at 38.71/72. The Reserve Bank of India did not intervene in the spot market nor did the SBI sell dollars to prop up the rupee, dealers said.
"The RBI is comfortable if the rupee stays between 38.50 and 38.80," a chief dealer in a European Bank said.
FORECAST: The rupee is expected to be rangebound on Friday and trade between 38.60 and 38.80.
Forward Premiums
Differences across the board came down despite the RBI conducting sell/buy swaps on account of some receiving pressure and lack of any large paying pressure.The RBI conducted swaps for April and June deliveries, dealers said. A chief dealer in a foreign bank said that most of the banks had squared their forward positions which could be one of the reasons for the fall in the differences.
"Importers were not there while some receiving pressure from exporters was seen," a dealer in a private bank said. The RBI on Tuesday reversed its stand and conducted sell/buy swaps after its buy/sell swap saw call rates declining and arbitrage opportunity rose which saw a fresh attack on the Indian rupee. On Thursday, six-month forward closed at 15.62 per cent (annualised) -- down from 17.25 per cent, one-month closed at 16 per cent down from 25 per cent and one-year closed at 13.82 per cent.
FORECAST: The forwards might go up on RBI intervention, dealers said.
Gilts
The securities market remained dull on Thursday with most players striking few deals in government securities. "There was, however, some interest in treasury bills which witnessed quite a highturnover during the day," said a dealer with a private sector bank. "Two public sector banks struck very large deals in T-bills," said a dealer with a foreign bank. The wholesale debt market segment of the National Stock Exchange witnessed trades worth Rs 398.39 crore on Thursday.
The most actively traded securities included the 13.50 per cent 1998 government stock maturing in 1998 which was traded for Rs 45 crore at a weighted yield of 15.06 per cent and the 13.85 per cent 2006 government loan which was traded at a weighted yield of 12.95 per cent. The 364-day T-bills maturing on April 10 were traded for Rs 121 crore at a weighted yield of 14.80 per cent. Repo deals worth Rs 20 crore were traded on Thursday.
FORECAST: Securities are expected to rule at the same levels on Friday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
