The call money rates ruled at 6 per cent on Tuesday. The call rates opened at 7-7.25 per cent compared with their previous close of 6.5-6.75 per cent. "They eased to 6-6.5 per cent in the afternoon to close at 5.50-5.75 per cent," a dealer from a nationalised bank said.

The Reserve Bank of India mopped up Rs 7,495 crore through its four-day fixed-rate repo in government of India dated securities for parties holding SGL and current accounts. The interest rate for the three-day fixed-rate repo was pegged at 7 per cent.

The central bank received 37 applications and accepted all of them. The market witnessed comfortable trading as there was adequate liquidity in the system and an equal demand to match the supply.

FORECAST: The call money rates are expected to fall further during the forthcoming week.

Spot Dollar

The rupee opened at 39.55 on Tuesday, unchanged from its previous close. It weakened by 10 paise against the greenback to Rs 39.65, but rallied to close at39.53.

Spot-dollar purchases by the State Bank of India (SBI) and good corporate demand for the greenback saw the rupee weaken to 39.60 soon after the start of the trades. "SBI bought dollars aggressively. They bought the greenback at 39.57 and 39.60," dealers said. SBI reportedly bought dollars ahead of the upcoming holidays."Calcutta is open on April 9. Most banks have their central dealing rooms in Mumbai, which is closed on the day," dealers said.

The inter-bank forex market put SBI's dollar purchases at close to $140 million. A few foreign banks were also seen buying spot dollar's after the SBI hit them with bid quotes. Most of the trades were struck in the 39.60-39.65 range. The dollar's high for the day was 39.67, while its low was 39.55.

FORECAST: The rupee is seen in the 39.60-61 band on Saturday.

Forward Premiums

The six-month annualised forward cover quoted at 6.9 per cent, but rallied later to close at 6.5 per cent on Tuesday.In the forwards, the premiums weakened by 5-7 paise atthe start of the trades, but recovered by close. September premiums weakened to 129/132 paise in early trades and quoted at 123/128 towards the finish. A few importers and corporates were seen covering for their requirements.

Premiums are expected to firm up on the next trading day, with call rates expected to tighten, dealers said."The rupee came off its weaker levels to close at 39.53. With demand for spot dollars tapering off by the close of trades, the forwards strengthened.

The six-month annualised forward cover finished the day at 6.5 per cent," a dealer with a brokerage said.

FORECAST: The six-month annualised cover is seen at 6.65-70 per cent on Saturday.

Gilts

The government securities market witnessed hectic activity on Tuesday. The prices in the government securities moved up by 20-25 paise across all maturities. "Most foreign banks and private sector banks were seen buying medium- and long-term securities," dealers said. Market dealers expect the government securities market tostabilise in a week's time.

The wholesale debt market of the NSE witnessed trades worth Rs 914.01 crore. The newly issued 11.10 per cent government loan maturing in 2003 was traded actively for Rs 320 crore at a weighted yield of 11.09 per cent. The 13.05 per cent government loan maturing in 2007 was traded actively for Rs 200 crore at a weighted yield of 11.76 per cent. The 12 per cent government loan maturing in 1999 was traded for Rs 55 crore at a weighted yield of 9.47 per cent.

FORECAST: The prices in the government securities market are likely to move up by next week.