Call MoneyThe call money market was a little pressured on Thursday despite adequate liquidity in the system.
The call rates opened relatively higher at 8-8.5 per cent as against Wednesday's close of 7.5-8 per cent. The rates later edged up to 8.35-9 per cent and closed at 8-8.5.
However, most of the transactions were conducted at 8-8.5 per cent, dealers said.
A few foreign and private banks in urgent need of funds accepted money at relatively higher rates, market dealers said.
The Securities Trading Corporation of India business turnover amounted to Rs 1,300 crore and its weighted average call money rate was 8.17 per cent, an STCI dealer said.
The Discount and Finance House of India extended market support of over Rs 1,600 crore, a DFHI source confirmed.
Dealers said the market ended squarish.
FORECAST: The overnight call money rates are likely to remain at the same level on Friday.
Spot Dollar
The spot rupee remained rangebound on Thursday and closed at 39.55, a tadweaker than its previous close of 39.54. The rupee opened at 39.53/55 and moved in a narrow groove in a dull day. Dealers said that the State Bank of India (SBI) was seen buying dollars throughout the day.
"But it was in small amounts and it did not have much impact on the rupee. SBI's presence did not have any impact on the rupee," a dealer from a private sector bank said. The rupee touched a low of 39.5250 and a high of 39.5550 during the day.
Dealers expect policy decisions from the new government for any action inthe spot rupee. "Till then the rupee will remain rangebound," a dealer said.
FORECAST: The rupee is expected to remain rangebound and rule between 39.50 and 39.60 on Friday.
Forward Premiums
Forward premiums continued to fall across the board for the fourth consecutive day on Thursday. The fall can be attributed to the Reserve Bank of India (RBI) announcement of a 100-basis-point cut in the repo rate to 8 per cent and a 50-basis-point cut in the bank rate to 10.50 percent.
"There was some paying pressure after forward premiums came down drastically during the day.
But on some paying pressure, the forward premiums rose marginally during the day," a dealer said.
Six-month forwards closed stronger at 8.10 per cent, down from 8.40 per cent. One-month forwards closed at 6 per cent, down from 6.50 per cent, and one-year forwards closed at 8.20 per cent. Dealers said that the spot rupee is likely to strengthen on the back of the strengthening forward rupee.
FORECAST: Dealers said that the forward premiums are likely to fall further on receiving pressure.
Gilts
The government securities market continued to witness brisk activity on good buying enquiries and the prices rose further by around 50-55 paise across the board on Thursday. However, some dealers said that the prices hovered around the revised price list of securities announced by the Reserve Bank of India on Wednesday.
Most buyers and sellers were seen trading in the securities market. Thewholesale debt market of the NSE witnessed trades worth Rs 662.63 crore. The 11 per cent government loan maturing in 2002 was traded for Rs 165 crore at a weighted yield of 11.26 per cent. The 14 per cent government loan maturing in 2005 was traded for Rs 65 crore at a weighted yield of 11.82 per cent.
The 364-day treasury bill maturing on April 24 was traded for Rs 30 crore at a weighted yield of 10.50 per cent.
FORECAST: The yield in the government securities market is likely to rise further.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
