Most deals were struck at 6.50-7.00 per cent, dealers said. The rates moved down below the Reserve Bank of India (RBI) repo rate of 7.00 per cent in the afternoon session after the RBI window was closed. The call rates are likely to remain moored to the RBI repo rate of 7.00 per cent in the coming days.

FORECAST: The call rates are likely to open at 7.00-7.50 per cent on Wednesday.

Spot Dollar
The spot-dollar market witnessed dull conditions on Tuesday owing to little corporate interest. The rupee opened at 39.68, compared with its previous close of 39.65. A little corporate demandfor the greenback saw the rupee weaken slightly to 39.70/71, where it hovered until mid-session.

A few foreign banks were seen buying the greenback in early trades, but corporate demand remained poor throughout the day. "Corporates are waiting for a clear indication from the Reserve Bank of India in its credit policy to be announced on May 29," a dealer with a European corporate bank said.

Most of the trades were struck in a narrow two paise band between 39.68-39.70. The greenback's high for the day was 39.70, while its low was 39.68. At close, the dollar was quoted at 39.68. The Reserve Bank pegged the reference rate for the dollar unchanged at 39.70.

FORECAST: The rupee is seen in the 39.68-39.71 band on Wednesday.

Forward Premiums
Forward premiums opened stronger on Tuesday compared with their previous close. The six-month annualised forward cover ended at 6.85 per cent as against its previous close of 7.13 per cent. "There was a dip of nearly 20 paise in the long forwards," adealer with a brokerage said.

October premiums ended at 139/143 paise, compared with their last close of 151/153 paise, November at 166/170 paise (180/183 paise) and December at 193/195 paise (210/213 paise).

The State Bank of India, dealers said, was seen receiving small lots in the long forwards. There was, however, little importer demand. The six-month annualised cover opened at 7.2 per cent, but closed stronger at 6.85 per cent. "Forward premiums dipped riding on the back of lower call rates, receiving pressure and expectations of a lower interest rate regime," a dealer with a British bank said.

FORECAST: The premiums are seen weaker by 2-5 paise on Wednesday.

Gilts
The secondary market for government securities regained some vitality on Tuesday after the Reserve Bank of India announcement of the credit policy date. The fact that the auction for the state government securities was over contributed to the improved activity, said a dealer.

The wholesale debt market of the NSEwitnessed trades worth Rs 546.54crore. The 11.75 per cent government paper maturing in 2006 was traded actively for Rs 146 crore at a weighted yield of 11.74 per cent. The 13.05 per cent paper maturing in 2007 was traded for Rs 30 crore at a weighted yield of 11.79 per cent. The zero-coupon government bond maturing in 2000 was traded for Rs 36 crore at a weighted yield of 10.26 crore. The 364-day treasury bill maturing on July 18, 1998, was traded for Rs 75 crore at a weighted yield of 7.58 per cent.

FORECAST: Activity in the secondary market for gilts is likely to be subdued on Wednesday.