The overnight call money rates moved in a narrow range on Tuesday. They opened at 6.25-7 per cent, little changed from their previous close of 6.25-6.75 per cent. They finally closed at 6-6.25 per cent. Most deals were struck at 6.50-7 per cent, dealers said.

The Reserve Bank of India announced a three-day fixed-rate repos in government of India dated securities for parties holding SGL and current accounts on May 27. The interest rate for the repos was pegged at 6 per cent.There was sufficient liquidity in the market. The Securities Trading Corporation of India's turnover was Rs 2,900 crore on a weighted average rate of 6.67 per cent. The DFHI's support to the market was to tune of Rs 2,000 crore.

FORECAST: The call rates are expected to hover at Tuesday's levelon Wednesday.

Spot Dollar

The rupee continued to be under pressure against the dollar on Tuesday and ended 17 paise lower than its previous close.The rupee opened at 41.05 and good corporate interest saw ittrade at 41.10/13 levels."There was a little month-end demand for the greenback and what appeared to be a bunching together of trades," a dealer with a European bank said.

The State Bank of India did not sell dollars, unlike Monday when the rupee hit its historic low of 41.18. Dealers, however, said that the State Bank was seen asking for quotes for the dollar towards the close of trades.

"The rupee ended lower than its previous close of 40.97 with the State Bank refraining from selling dollars," dealers said. The dollar's high for the day was 41.17 while its low was at 41.09. The Reserve Bank of India fixed its reference rate for the dollar at 41.13.

FORECAST: The rupee's new resistance barrier is seen at 41.20; may move in the 41.15-41.18 band on Wednesday.

Forward Premiums

Forward premiums closed stronger against the dollar on Tuesday. The six-month annualised forward cover ended at 9.13 per cent as against its previous close of 9.31 per cent.

"There was not much covering... mostof the corporates appear to have done so on Monday, but many are still ready to cover at the existing levels," dealers said.

A few corporates were covering in the near terms while the State Bank of India was seen receiving May dollars towards the close of trades.

June dollars closed at 31/33 paise, July at 60/62 paise, August at 91/93 paise, September at 122/127 paise and October at 158/160 paise.

The one-month annualised forward cover closed at 8.56 per cent, compared with its previous close at 8.83 per cent, two months at 8.72 per cent (8.91 per cent) and three months at 8.68 per cent (8.86 per cent).

FORECAST: The six-month cover is seen at 9.9-9.14 levels on Wednesday.

Gilts

The government securities market remained subdued on Tuesday on expectations of the Rs 4,000-crore state auction to be held on Wednesday. The market witnessed little activity, dealers said, though prices fell by 5-10 paise.

"The market is expecting a cut-off yield of 12-12.10 per cent for the nine-yearpaper auction," said a dealer.

A few foreign banks were seen buying medium- and long-dated securities from the market, dealers said. Some trading was witnessed in the 2007 and 2008 government loans, they added.The wholesale debt market of the NSE witnessed trading worth Rs 238.53 crore.

The 12.15 per cent Maharashtra government loan maturing in 2008 was traded for Rs 45 crore at a weighted yield of 12.16 per cent. The 11.75 per centgovernment loan maturing in 2006 was traded for Rs 25 crore at a weighted yield of 12.03 per cent.

FORECAST: The prices in the government securities market are likely towitness a further fall on Wednesday.