The overnight call-money rates came down by 100 basis points on Monday following the one-percentage cut in repo rate by the Reserve Bank of India (RBI). The rates opened at 5.10-5.40 per cent on Monday. It moved in the range of 5.00-5.10 per cent for most part of the day, to finally close at 5.05-5.10 per cent.

The RBI mopped up Rs 4,137 crore through a three-day fixed-rate repo held on June 15. The central bank received four applications, and accepted all of them. The interest rate for the repo was pegged at 5 per cent.

The DFCI extended market support to the tune of Rs 1,600 crore. The Securities & Trading Corporation of India's (STCI) turnover was Rs 2,100 crore at a weighted average of 5.11 per cent.

FORECAST: The overnight call-money rate is expected to open at 5-5.50 level on Tuesday.

Spot Dollar

The State Bank of India (SBI) sold and bid for the greenback on Monday.

The rupee opened the day at 42.08-42.11, weaker from its previous close of 42.01/02.Corporate demand for dollars in a thin market saw the rupee go lower to 42.15-42.18 levels. State Bank, which reportedly sold dollars at this point, helped the rupee recover to 42.11/12, dealers said. In later-day trades, the greenback demand reappeared, pushing the rupee down to 42.20/21 thereabouts. State Bank's dollar purchases at these levels saw the greenback quote at its intra-day high of 42.30/32. Towards close, SBI's and inter-bank dollar sales helped the rupee rally to end at 22.25/28.

There was little bit of covering in the spot market, dealers said. Cash/tom was done at 0.25/0.50 paise with cash/spot at 0.75/125 paise. Elsewhere, the Reserve Bank of India pegged its reference rate for the dollar at 42.27, compared to its Friday fix of 41.96.

FORECAST: Rupee seen lower in the 42.25-42.33 band on Tuesday.

Forward Premiums

Long forwards closed higher by nearly 20 paise from their weekend closing levels. The six-month annualised forward cover ended at 11.15 per cent, up from itsprevious finish at 10.59 per cent.

"There was quite a bit of paying pressure both in the long and near forwards," dealers said.

The State Bank of India was seen actively paying on behalf of its corporate clients. "State Bank was active all through the day... it may have paid at least $50 million in the forwards," dealers said.

January premiums closed at 280/285 paise, February at 314/319 paise, and March at 352/360 paise. In the near terms, paying pressure saw June dollars close at 19/22 paise, higher from opening levels at 14/16 paise.

FORECAST: Six-month annualised cover seen in the 11.05-11.12 band on Tuesday.

Gilts

High volatility in the forex market failed to jack up gilts' prices despite the Reserve Bank cutting the repo rate by 100 basis points from 6 per cent to 5 per cent.

When the market opened, the prices in the government-securities market moved up by 40-60 paise across the board, though in the afternoon, the prices sharply fell by the same amount, bringing them backto the original opening level.

The wholesale-debt market of the National Stock Exchange witnessed trading worth Rs 469.97 crore. The 13.65 per cent government loan maturing in 1999 was traded for Rs 40 crore at a weighted yield of 9.59 per cent. The zero- coupon government bond maturing in 2000 was traded for Rs 70 crore at a weighted yield of 10.97 per cent.

FORECAST: The prices in the government-securities market likely to remain stable on Tuesday.