The call money rates ruled easy on Monday. "The market remained squarish at the interbank call money market as there was ample liquidity in the system," a market dealer said. The rates opened at 7-7.10 per cent, eased to below 7 per cent and finally closed at 6.5-6.75 per cent. According to dealers, the market witnessed comfortable trading as there was adequate liquidity and an equal demand to match the supply, which resulted in easy squarish trading.

The STCI's total turnover amounted to Rs 1,300 crore, while the weighted average call rate was 6.78 per cent. The Reserve Bank of India announced a four-day fixed-rate repo at 7 per cent in government of India dated securities on April 7, 1998, for parties holding SGL and current account. The RBI mopped up Rs 6,407 crore through its fixed-rate repo. It received 28 applications and accepted all of them.

FORECAST: The call rates are expected to hover around 6-7 per cent on Tuesday.

Spot Dollar

The rupee opened at 39.50against the dollar on Monday.

The State Bank of India (SBI) and a few foreign banks were seen buying dollars. The SBI was seen buying spot dollars for the greater part of the day. Towards the close of trades, many few foreign banks also purchased the greenback.

"Demand picked up because the corporates are closed on Sunday, though it is not a bank holiday. They are buying ahead on account of this," a dealer with a European corporate bank said.

Most of the trades were done in the 39.53/55 range. The dollar's high for the day was 39.55, while its low was 39.50. Demand for dollars towards the close of trades saw the rupee weaken by five paise to 39.55 from its opening quote of 39.50. The Reserve Bank of India pegged its reference rate for the greenback at Rs 39.51 compared with its weekened's fix of Rs 39.51.

FORECAST: The rupee may weaken a little to 39.53/55 on Tuesday.

Gilts

Hectic trading was witnessed in the government securities market on Monday. "Activity in the securities marketwas mainly due to the auction of the Rs 4,000-crore five-year paper under the central government's borrowing programme for fiscal 1997-98," a primary dealer said.

The wholesale debt market of the NSE witnessed trades worth Rs 850.56 crores. The 13.05 per cent government loan maturing in 2007 was traded for Rs 145 crore at a weighted yield of 11.73 per cent. The 11.15 per cent government loan maturing in 2002 was traded for Rs 140 crore at a weighted yield of 10.82 per cent. The 11.25 per cent government loan maturing in 2005 was traded for Rs 110 crore at a weighted yield of 11.43 per cent.

FORECAST: The government securities market is expected to witness hectic activity on Tuesday.

Forward premiums

The six-month annualised forward cover closed weaker at 6.73 per cent on Monday compared with its previous close of 6.66 per cent. April premiums closed at 5/6 paise, May at 21/33 paise, June at 42/44 paise and July at 64/66 paise. Spreads thinned in the long forwards with December premiumsquoting at 201/205 paise, January at 230/234 paise and February at 252/256 paise.

A few importers were seen covering as forward covers are expected to be dearer in the days ahead. "Inter-bank liquidity will turn tight with outflows on account of the Rs 4,000-crore Reserve Bank of India auction today and a four-day fixed-rate repo at 7 per cent on Tuesday," a dealer with a British bank said. The call rates were seen in the 7-7.10 per cent range.

Dealers said that the call rates will firm up if the RBI retains any oversubscribed portion in Monday's gilt auction.

FORECAST: The six-month annualised forward cover is seen weakerat 7 per cent on Tuesday.