Call MoneyThe call money market remained squarish on Monday. The call rates opened at 8-8.15 per cent, ruled at 8.25-8.75 per cent throughout the day and closed at 8.10-8.30 per cent. According to market dealers, a large amount of liquidity was sucked out of the system in repos and the rates finally closed at 8.10-8.30 per cent. "There was ample liquidity in the call money market," dealers said.
The Securities and Trading Corporation of India's weighted average amounted to 8.21 per cent and its total turnover was Rs 2,200 crore. The Reserve Bank of India mopped up Rs 274 crore through a three-day fixed-rate repo in government of India dated securities in SGL and current account.
FORECAST: The call money rates are likely to hover at the same level on Tuesday.
Spot Dollar
The spot rupee remained rangebound on Monday as market players stayed away on account of the year-end. Opening at 39.51/52 -- weaker than Friday's close of 39.48/50 -- the rupee traded at these levels for awhile before strengthening marginally to trade at 39.49/50.
"Trading was dull today," a dealer in a foreign bank said. The State Bank of India was missing from the market and as a result most traders stayed away, dealers said.
"Banks are avoiding taking position because of March 31," a chief dealer in a private sector bank said. The rupee finally closed at 39.49.
The greenback's high for the day was 39.51, while its low was 39.49. Most deals were struck in the 39.51/52 range. Dealers said that further selling of dollars by corporates will see the rupee strengthen.
FORECAST: The rupee is likely to remain rangebound on Tuesday and stay at Monday's levels.
Forward Premiums
Heavy receiving pressure in the forward market saw the premiums fall across the board on Monday. Dealers said that the near-term forwards fell harder than the long-term ones.
"Exporters came in with their remittances as they thought that differences will not arise from the present levels," a dealer in a foreignbank said. Six-month forwards, which closed at 7.48 per cent on Friday, fell to close at 7.05 per cent. One-month forwards fell from 8 per cent on Friday to 6.15 per cent. One-year forwards closed at 7.85 per cent. With this, the forward curve turns linear with long-term forward premiums higher than the near-term ones. "The correction has come today," a chief dealer said.
FORECAST: The six-month forward premiums are likely to fall marginally on Tuesday.
Gilts
The government securities market remained dull on Monday. "We expect the market to witness some change only after the interest rates move northward," a dealer said.
"Hectic trading was witnessed in the government securities market last week when big corporates and mutual funds were busy buying securities to square up their positions. Currently, the market is dull though some trade took place in the latter half of the day," market dealers said.
The wholesale debt market of the NSE witnessed trades worth Rs 1,115.14 crore. The 13.50per cent government loan maturing in 1998 was traded for Rs 51 crore at a weighted yield of 10.80 per cent. The 12.75 per cent government stock maturing in 2002 was traded for Rs 40 crore at a weighted yield of 11.30 per cent.
FORECAST: The yield in the government securities market is expected to go up by the end of this week.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
