The overnight call money market witnessed an extremely easy trend on Monday owing to plenty of loose liquidity in the system to meet the limited demand of borrowers. The call rates opened at 6.00-6.05 per cent and dipped to 5.75-6.00 per cent at the close.

Most of the business was done at 5.90-6.00 per cent. Sufficient liquidity inflows are expected this week, dealers said. Around Rs 7,938 crore inflows were expected on Monday on account of the reversal of the four-day fixed-rate repo conducted by the Reserve Bank of India last Thursday, they added.

The RBI mopped up around Rs 7,420 crore at the six per cent four-day fixed-rate repo. The Securities Trading Corporation of India weighted average call money rate was 5.91 per cent at a total business turnover of Rs 1,200 crore, an STCI official said.

FORECAST: The call money rates are likely to move in a narrow range on Tuesday.

Spot Dollar

The inter-bank spot market witnessed dull conditions on Monday as there waslittle corporate demand for the greenback.

The rupee opened at 39.72/73, unchanged from its previous close. The dollar traded in a narrow band of 39.72-39.73 till mid-session as market players and corporates stayed away. The greenback's intra-day high was 39.73 while its low was 39.72.

"Few deals were done... dollar supplies more than matched the demand," a dealer with a European corporate bank said.

Towards the close, little corporate demand for the greenback saw the rupee close at 39.74, lower than its opening quote of 39.72.

Elsewhere, the Reserve Bank of India pegged its reference rate for the dollar at 39.73, unchanged from its previous fix.

FORECAST: The rupee is seen in the 39.71-39.74 range on Tuesday.

Forward Premiums

Low call rates and poor demand for forward dollars saw the six-month annualised forward cover finish at 6.18 per cent on Monday, stronger than its previous close of 6.30 per cent.

Dealers said that there was paying pressure in the near forwards withreceiving pressure in the long terms. Towards the close, a few banks were seen profit-taking in the near terms. Near forwards closed stronger by 3-4 paise from their previous close. May premiums finished at 5/7 paise, June at 20/22 paise, July at 41/43 paise and August at 62/64 paise.

In the long forwards, January dollars ended at 196/200 paise, February at 218/223 paise and March at 246/251 paise.

FORECAST: The six-month annualised cover is seen at 6.16-6.19 per cent on Tuesday.

Gilts

The secondary market for government securities witnessed hectic activity on Monday. In brisk trading, the prices rose by around 10-15 paise across the board on the lowered revised rate for government papers. The wholesale debt market of the National Stock Exchange witnessed trading worth Rs 547.61 crore. The zero-coupon government paper maturing in 2000 was traded for Rs 30 crore at a weighted yield of 10.14 per cent. The 11.15 per cent government stock maturing in 2002 was traded for Rs 64 crore at aweighted yield of 10.90 per cent. The 11.75 per cent government loan maturing in 2006 was traded for Rs 54 crore at a weighted yield of 11.66 per cent. The 13.05 per cent government loan maturing in 2007 was traded for Rs 45 crore at a weighted yield of 11,77 per cent. The value of debentures traded was at 13.58 lakh.

FORECAST: The secondary market prices of government securities are likely to move up slightly on Tuesday.