The call rates opened higher around 7-7.5 per cent as against Tuesday's close of 6.75-7 per cent level.

It shot up to 8.5-8.75 per cent on heavy borrowing interest with lenders quoting relatively high rates. The call rates closed at 6-6.25 per cent. Most deals were done in the region of 7.5-8 per cent level, dealers said.

According to dealers, pressure was felt in the overnight call money market initially but the rates eased at the fag end owing to the adequate loose liquidity in the system to meet the demand of borrowers.

The Securities Trading Corporation of India turnover amounted to Rs 1500 crore at a weighted average rate of 7.59 per cent.

Forecast: The overnight call money rate is likely to hover at 7-7.5 per cent on Thursday.

SPOT DOLLAR

The rupee depreciated further against dollar on Wednesday. It opened at 42.30/35 in the morning against Tuesday's close of 41.23/24. The rupee further went down to 42.40/45. However, the State Bank entered the market latein the morning and the rupee gained to 42.35/38.

In the afternoon, the rupee further dipped to 42.40/41 before settling at 42.30/33 to finally close at 42.25/30. The rupee firmed up at the fag end of the day as the market witnessed corporates selling dollar. "Fearing the rupee to depreciate further, the forex market saw some corporate covering," said a dealer at a private bank.

Most trade were conducted at 42.30 and 42.40 level. "Sentiments are quite bearish and nobody wants to sell in the market. However, lot of buying pressure was felt in the market on Wednesday," dealers said.

Strong corporate demand for dollar saw the rupee weaken further.

Forecast: The rupee is likely to open at 42.30-42.50 level on Thursday.

FORWARD PREMIUMS

The forward premium hovered around 9-10 per cent band on Wednesday. The six-month annualised forward cover opened at a high of 10.65 per cent compared to Tuesday's close of 10 per cent. However, it closed at 9.67 per cent. Dealers maintained that there waspanic covering at the fag end when the rupee touched 42.25/30 level.

Premiums dropped by around 8-10 paise from earlier levels - December premium opened at 222/227 paise level as against yesterday's close of 233/236 paise, February premium opened at 295/300 paise against yesterday's close of 309/313 paise and March premium opened at 327/332 against the previous close of 347/352 paise.

Forecast: The six-month annualised forward cover is expected to fluctuate between 9.50-10.30 per cent.

GILTS

The prices in the government securities market fell by 15-30 paise across all maturities. According to dealers, high selling pressure was seen in the government securities market on Wednesday as most banks were seen selling securities in the market.

"The fluctuation in the forex market created a selling pressure in the securities market," said a dealer from a private bank. The wholesale debt market of NSE witnessed trading worth Rs 180.71 crore. The 13.55 per cent government loan maturing in 2001was traded at a weighted yield of 11.63 per cent for Rs 15 crore. The 12.69 per cent government loan maturing in 2002 was traded for Rs 25 crore at a weighted yield of 11.65 per cent. The zero coupon government loan maturing in 1999 was traded for Rs 30 crore at a weighted yield of 10.33 per cent.

Forecast: The prices in the government securities market are likely to fall further on Thursday.