Call MoneyThe overnight call money rate opened in the region of 8.00-9.00 per cent on Tuesday as compared to the closing rate of 5.50-6.50 per cent on Monday.
The call rate opened at 8.00-9.00 per cent, eased a little in the afternoon to close at around 8.50-9.00 per cent after the RBI sucked out over Rs 3,200 crore from the system through the three-day nine per cent fixed rate repos. Most deals were struck in the region of 7.00-9.00 per cent and the market ended on a squarish note, said a dealer from a private sector bank. Some stray deals were also struck at 7 per cent on Tuesday, dealers said. The weighted Securities Trading Corporation of India average was 7.83 per cent on a turnover of Rs 900 crore. "As compared to yesterday, some lenders were seen trading in the market. Even some private banks started lending in the late afternoon," a nationalised bank dealer said.
FORECAST: The overnight call money rate is likely to open at 7.00-9.00 per cent on Wednesday.
SpotDollar
The Indian unit opened at 38.72/74 to the greenback compared to its previous close at 38.73/75. The State Bank of India's purchase of dollars saw the rupee closing weaker at 38.80/82 to the greenback.
Buying-interest for dollars appeared at Rs 28.75/77 levels, a dealer with a European bank said. Good corporate demand for dollars backed by fair supplies saw the dollar being traded in a narrow range of Rs 38.73-38.76. In later-day trades, the rupee weakened to 38.80/82 to the greenback as the SBI made spot purchases. "State Bank bought dollars at around Rs 38.76/78 levels," a dealer with a brokerage said. Trades were quiet in the inter-bank forex market with not much buying or selling. The greenback's high for the day was Rs 38.80/82, while its low was Rs 38.74.76. Meanwhile, the Reserve Bank of India fixed its reference rate for the dollar at Rs 38.74 compared to its previous fix at Rs 38.73.
FORECAST: The greenback is likely to be quoted in the Rs 38.74-38.78 band onWednesday.
Forward Premiums
The Reserve Bank of India kept away from conducting buy/sell swaps today. The six-month annualised forward premium closed stronger despite stronger overnight at 8.50-9.00 per cent levels on account of an outflow of Rs 3,000 crore due to repos.
February premiums finished at 14/18 paisa, March at 65/68 paisa, while April ended the day at 168/173 paisa.
Dealers said that a few exporters realised their dollars, while some importers cancelled their forward contracts. "Corporates are having a rethink now that the forwards are going stronger," a forex broker said. The six-month annualised forward cover closed at 14.10 per cent from the day opening quote at 14.60 per cent.
FORECAST: Six-month annualised premia cover is seen in the 15.01-15.10 per cent range on Wednesday.
Gilts
After a week of inactivity and a dull securities market, government securities witnessed some action on Tuesday. The short- and long-term securities and treasury bills were tradedheavily in the market, a dealer from a private bank said.
The downward movement of call money rates, rupee stability and good response to the Reserve Bank of India repo are positive signals and the securities market has responded to these market indicators, dealers said. The wholesale debt market segment of the National Stock Exchange witnessed trades worth Rs 620.23 crore. The 12.50 per cent government stock maturing in 2004˙was traded for Rs 80 crore at a weighted yield of 12.10 per cent. The 11.75 per cent government loan maturing in 2001 was traded for Rs 80 crore at a weighted yield of 11.67 per cent.
FORECAST: Securities' prices are likely to move northwards in the next few weeks.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
