The overnight call money rates remained easy on Wednesday. The call rates opened at 6.25-6.50 per cent as against their previous close of 6-6.25 per cent. They eased in the afternoon to finally close at 5.75-6 per cent.

Some deals were also struck at 4.50-5 per cent, dealers said. The market was squarish, they added.

The Reserve Bank of India mopped up Rs 1,200 crore through a three-day fixed-rate repos in government of India dated securities for parties holding SGL and current accounts.

The central bank received two applications and accepted both of them.The Securities Trading Corporation of India weighted average rate was 6.02 per cent at a Rs 2,100-crore turnover.

The Discount and Finance House of India extended its market support to the tune of Rs 1,500 crore.

FORECAST: The overnight call rates are likely to be easy on Thursday.

Spot Dollar

The rupee hit a record low of 41.50 against the dollar on Wednesday. The rupee opened at 41.25/41.30, compared with itsprevious close of 41.17, and soon touched its historic low of 41.50 owing to corporate interest and short-covering by banks.

Reports of the World Bank's hold on loans and European Union sanctions affected the market, dealers said.At 41.50, many a bank was seen squaring up. The rupee quickly gained to 41.40 on corporate and exporter dollar sales.

The State Bank of India reportedly sold dollars at 41.35-41.40, dealers said, but bank officials denied any such action. Enquiries by the Reserve Bank of India saw the dollar hit its day's low of 41.22 in later trades to finally close at 41.31/35.

Elsewhere, the Reserve Bank of India pegged its reference rate for the greenback at 41.30, compared with its previous peg of 41.13.

FORECAST: The rupee is seen testing the 41.50 levels on Thursday.

Forward Premiums

The six-month annualised forward cover weakened to 9.29 per cent on Wednesday, as against its previous close of 9.13 per cent. The premiums opened weaker by about 3 paise across allmaturities. Towards the close of trades, forwards had gained on receiving pressure, largely in the near term.

"There was not much interest in the forward market... call rates also ruled around 6 per cent," dealers said.

June dollars ended at 33/35 paise, July at 62/64 paise, August at 93/95 paise and September at 124/127 paise. The six-month annualised forward cover finished at 9.29 per cent, with the one-month one at 8.87 per cent, the two-month one at 9.29 per cent and the three-month one at 9.20 per cent.

FORECAST: The six-month annualised forward cover is seen at 9.30 levels on Thursday.

Gilts

The prices in the government securities market fell by 20-30 paise across all maturities on Wednesday. The market was dull as not many banks were seen trading on expectations of the nine-year paper auction results.

Dealers expect the yield of almost all the government securities to move northwards in the near future.

The wholesale debt market of the National Stock Exchange witnessedtrading worth Rs 189.56 crore. The 12.69 per cent government loan maturing in 2002 was traded for Rs 40 crore at a weighted yield of 11.66 per cent. The 11.25 per cent government loan maturing in 2005 was traded for Rs 30 crore at a weighted yield of12.01 per cent.

The 364-day treasury bills maturing on July 18 were traded for Rs 5 crore at a yield of 9.5 per cent.

FORECAST: The prices in the government securities market are likely to move southwards on Thursday.