The overnight call money rates ruled below 7 per cent level on Saturday. The overnight call money rates opened at 7-7.10 per cent in the morning, a little higher than Tuesday's close of 6.5-6.75 per cent. "The overnight call rates opened at 7-7.10 per cent in the morning, eased to 6.50-6.75 per cent in the afternoon to close at seven per cent level," dealers said.

"There was ample liquidity in the system on Saturday. Institutional lenders like UTI, LIC and a couple of mutual funds were seen lending in the market. However, there were hardly any borrowers in the market. "Early morning borrowers were seen quoting at 6.50-6.75 per cent though most of them went in for RBI three-day fixed rate repo," said a dealer from a private sector bank.

According to dealers, fairly comfortable conditions were witnessed at the overnight call money market as there was adequate loose liquidity in the system to meet the demand of borrowers at the beginning of the new fortnight trading. However, most of thebanks parked their funds at the central banks' repo window, a funds manager said.The Reserve Bank of India on Saturday announced a three-day fixed rate repos in government India dated securities on April 12 for parties holding sgl and current account. The interest rate for the three-day fixed rate repo was pegged at seven per cent.

Spot Dollar

Trades were next to nothing in the inter-bank forex market. Dealers estimated the total volume of business transacted in the spot-market at around $10 million.

The Indian unit opened at 39.50 to the greenback as against its previous close at 39.53. For most of the day, the rupee was seen in a narrow 3-paise-band between 39.51 -- 39.53.

"Trades were dull as most of the corporates were off", said dealer with a state-run bank. The State Bank of India was not present in the market.

The dollar's high for the day was 39.54 while its low was 39.50.The Reserve Bank of India pegged its reference rate for the dollar at Rs 39.5300 as against its fix at Rs 39.6500on the last working day.

FORECAST: Dull trades to continue on Sunday; rupee seen unchanged in the 39.50-39.53 band

Forward Premiums

There was little trading interest in the forwards. With corporates away, dealers had a quite day in front of their screens.

The six-month annualised forward cover held steady at its previous closing quote at 6.5 per cent. The State Bank of India, dealers said, was not even quoting its rates for forward dollars.

"There was no demand whatsoever from corporates. Most had contracted their forward dollar-demands on Monday and Tuesday itself...the last active days in this week", said dealers.The inter-bank forex market had remained closed from Wednesday onwards and had opened for trades only today.

FORECAST: Trading to be dull on Sunday; six-month forward cover to hold at 6.65 per cent levels.

Gilts

The prices in the government securities market moved up by 20 to 25 paise across all maturities on Saturday. The market, opened on a dull note,however, picked up by late afternoon. In the afternoon, almost all nationalised and foreign banks were seen picking up short dated securities heavily from the market, dealers said.

"The market witnessed lot of demand for long dated security maturing in 2007 and almost all the banks were clamouring to buy this securities," said a dealer from a nationalised bank. According to market dealers, short and long term securities were hot favourite with most banks as yield on these securities is quite high.

Market sources said that on Saturday there was ample liquidity in the system and almost all banks were flushed with funds. Most banks were seen buying 13.05 coupon 2007 securities which pushed up its price by two rupee. "Most banks, which bought this security from RBI window a couple of days ago, were seen off-loading the security in the market at a much higher rate," said a dealer.

Most banks, which bought this security at Rs 104.55 from RBI window, were seen selling the security at Rs 107 on Saturday.