Call MoneyThe call money rates rose following a good demand from commercial banks. The call rates opened at 8.75-9.00 per cent, higher than the previous close of 7.75-8 per cent. They eased to 8.25 per cent in the afternoon to close at 8.25-8.50 per cent, market dealers said. "Demand for money by banks increased in the afternoon and many banks witnessed huge inflow of funds," a market dealer said.
Just before the close, financial institutions entered the market and injected a good amount of money into the system which lowered the interest rates to 8.25-8.50 per cent, leading dealers said. The Securities Trading Corporation of India's total turnover was Rs 2,000 crore and the weighted average was 8.65 per cent. The Discount and Finance House of India injected Rs 1,500 crore into the system.
FORECAST: Market dealers expect the call rates to remain at the same level on Friday.
Spot Dollar
The spot rupee remained rangebound on Friday and reacted in a lukewarm manner to the appointment ofYashwant Sinha as the finance minister. On Friday, the rupee opened at 39.52 and closed at 39.51, a tad stronger than its previous close of 39.54.
The rupee moved in a narrow groove of 39.51/53 in a dull day. Dealers said that the State Bank of India was seen buying dollars. "But it was in small amounts and it did not have much impact on the rupee," a dealer from a private sector bank said. The rupee touched a low of 39.51 and a high of 39.54 during the day. Dealers expect policy decisions from the new government for any action in the spot rupee.
FORECAST: The rupee is expected to remain rangebound and rule between 39.50 and 39.60 on Monday.
Forward Premiums
Forward premiums were volatile on Friday as inter-bank activity picked up. Premiums, however, continued to fall across the board for the fifth consecutive day on Friday.
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 bankrate to 10.50 per cent. "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 rupee rose by 5 paise, but on import covering fell by 6 paise and closed the day at 8.0 per cent.
FORECAST: Dealers said that the forward premiums are likely to fall further on receiving pressure.
Gilts
The prices in the government securities market fell by 25-30 paise on Friday as the market witnessed hectic activity.
The profit margins fell in the government securities market, a dealer from a public sector bank said. Moderate activity was witnessed in the government securities prices. The wholesale debt market of the NSE witnessed trades worth Rs 353.90 crore. The 13.50 per cent government stock maturing in 1998 was traded at a weighted yield of 11.48 per cent.
The 14 per cent government loan maturing in 2005 was traded for Rs 30 crore at a weighted yield of 11.92 percent. The 11.25 per cent government loan maturing in 2005 was traded for Rs 60 crore at a weighted yield of 11.88 per cent.
FORECAST: The government securities market is likely to remain at the same level on Monday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
