Call MoneyThe overnight call money rates remained rangebound on Thursday. The call money rate opened in the region of 9.25-9.30 per cent on Thursday as compared to Wednesday's close of 9-9.25 per cent.
It eased in the afternoon to close at 9-9.25 per cent. Most deals were struck in the region of 9.10-9.25 per cent, dealers said. According to dealers, the call money market was squarish.
The traditional lenders were present in the market like LIC, UTI, GIC among others and private sector and foreign banks were seen borrowing from the market.The RBI on Thursday announced a three-day fixed rate repo instrument in government of India dated securities at nine per cent on February 20 for parties holding SGL and current account. Meanwhile, RBI on Thursday received two bids worth Rs 43 crore for its four-day fixed rate repo held on 19 and accepted both of them.
FORECAST: The overnight call money rate is likely to hover in the region of 9-9.50 per cent on Friday.
Spot Dollar
The spot rupeeremained quiet on Thursday and the Indian unit moved in a narrow range vis-a-vis the dollar, dealers said. Opening at 38.84, at the same levels of Wednesday's close, the rupee weakened on corporate demand for the greenback to trade at 38.89. "The State Bank of India was in the market to buy dollars at 38.86/87 which saw the rupee weakening," a dealer in a private bank said.
However, some exporters did sell dollars but in small amounts. The rupee, however, settled to trade between 38.85 and 38.88. "There was hardly any action in the market. It seems that the rupee will settle at around 38.70 and 38.90," a dealer in a private sector bank said. According to him, exporters are still waiting for the market to stabilise. "They are still waiting and watching the situation as they expect the rupee to weaken," the dealer said.
FORECAST: The rupee is expected rule between 38.80 and 38.90 on Friday unless the SBI steps in to buy in large amounts.Forward Premiums
Forwards remained stable on Thursday andweakened marginally over Wednesday's close. Dealers said that corporates were buying six-month forwards to cover their positions today. "Some importcovering has been taking place especially in the far forwards which is seeing some hardening," a dealer in a private sector bank said. The Reserve Bank of India was not present in the market to conduct swaps, dealers said.
"Foreign banks are continuing to pay on behalf of their corporate clients," a dealer in a public sector bank said. Six-month forwards firmed up to close at 14.50 per cent--35 basis points higher than Wednesday's close of 14.15 per cent. One-year forwards stayed firm on Thursday to close at 13.60--unchanged from Wednesday's close of 13.60 per cent (annualised).
FORECAST: Dealers said that the premia is likely to firm up further as importers are covering and exporters are not bringing in their saleproceeds.
Gilts
The government securites market on Thursday witnessed subdued trading in the short- and medium-term securities. "Themarket was dull on Thursday and hardly any activity was seen in government securities. Some selling pressure was witnessed in the T-bills segment," said a dealer from a private sector bank. The wholesale debt market of the National Stock Exchange witnessed trades worth Rs 416.60 crore.
The 13.40 per cent government loan maturing in 1999 was traded for Rs 40 crore at a weighted yield of 11.88 per cent. The 14 per cent government loan maturing in 2005 was traded for Rs 25 crore at a weighted yield of 12.29 per cent. The 364-days treasury bill maturing on April 24, 1998, was traded for Rs 250 crore at a weighted yield of 12.95 per cent. Repo trades worth Rs 30 crore were transacted on Thursday.
FORECAST: The government securities market is not likely to witness much activity on Friday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
