The call rates dipped to 5-5.5 per cent on the reporting Friday owing to slack demand for funds as most banks had covered their positions for the fortnight.

Banks report their reserves position to the Reserve Bank of India (RBI) every alternate Friday. They normally minimise their borrowings on the reporting day as they cover their positions well ahead of the notified Friday.

The call rates opened at 6.75-7 per cent and fell to 5-5.5 per cent at the close. The three-day money was transacted at around 7 per cent, dealers said.

The Securities Trading Corporation of India weighted average call money rate was 6.10 per cent at a total business turnover of Rs 1,300 crore, an STCI treasury manager reported.

Business was at a low ebb on the squaring-up day (notified Friday) due to slack demand for funds.

FORECAST: The call rates are likely to be quoted at around 7 per cent on Saturday.

Spot Dollar

The rupee held steady against the dollar in dull and listless trade onFriday. The rupee opened at 39.70/72, weaker than its previous close of 39.69, and was firm for most part of the day.

"Corporate demand for the greenback was poor... Dollar inflows were good, but bids were next to nothing," dealers said.

The dollar's high for the day was 39.72, while its low was 39.68. Most deals were struck at 39.70, dealers said. The rupee was seen at 39.69/71 by the close.

Dealers said corporate demand will pick up only after the announcement of the Reserve Bank of India Credit Policy on May 29. "Demand is very poor... there is little interest for the greenback as of now," a dealer with a European corporate bank said.

Meanwhile, the central bank fixed its reference rate for the greenback at 39.71, lower than its previous fix of 39.69.

FORECAST: The rupee is seen at 39.72 on Monday.

Forward Premiums

Forward premiums closed stronger in the inter-bank forex market on Friday.

The six-month annualised forward cover ended at 6.65 per cent, compared with its previousclose of 7 per cent.

Long forwards also finished stronger as against their previous close. November premiums ended at 156/159 paise, December 184/187 paise, January 210/215 paise and March 262/265 paise.

"On an average, long forwards closed stronger by 14-20 paise from their previous closing levels," a dealer with a brokerage said. Premiums fell as rumours of a cash-reserve ratio cut and another cut in the Bank Rate gripped the market. Inter-bank dealers expect more liquidity after the Credit Policy on May 29.

FORECAST: The six-month annualised cover is seen at 6.63 per cent on Monday.

Gilts

The secondary market for government securities witnessed dull conditions on Friday. However, there was a mild profit-selling, which pushed down overnight government paper prices.

The Reserve Bank of India (RBI) has announced the 10-year paper auction on April 30 to raise Rs 4,000 crore just a day before the release of the Credit Policy for the first half of the fiscal. The wholesale debt marketof the NSE witnessed trades worth Rs 380.33 crore. The 11.75 per cent government loan maturing in 2006 was traded for Rs 90 crore at a weighted yield of 11.68 per cent. The 11.10 per cent government stock maturing in 2003 was traded for Rs 40 crore at a weighted yiled of 11.06 per cent. The 13.05 per cent government loan maturing in 2007 was traded for Rs 30 crore at a weighted yield of 11.76 per cent.

FORECAST: The gilt prices are likely to remain rangebound.