The call money rates moved up a tad on Wednesday following buying pressure from banks. The call rates opened higher at 6.50 per cent, compared with their previous close of 5.50-6.00 per cent.Later the rates edged up to 6.75-7 per cent, but finally fell and closed at 6.50-6.75 per cent. Most deals were struck at 6.25-6.50 per cent and a few stray deals at 7 per cent, dealers said.

There was some rush by banks early in the day to cover their positions. The tightness in liquidity was attributed to over Rs 3,700 crore being locked up in the Reserve Bank of India's fixed-rate repos.

The Discount and Finance House of India extended market support of over Rs 1,400 crore while the Securities Trading Corporation of India business turnover amounted to Rs 1,900 crore at a weighted average rate of 6.40 per cent, official sources said.

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

Spot Dollar

Good corporate demand saw the rupee weaken by 9 paise fromits opening levels on Wednesday. A foreign bank bought dollars on behalf of one of the corporates which had a huge portion uncovered, dealers said.

The rupee opened at 42.47/49, unchanged from its previous close, and weakened on selective buying pressure to 42.61/62,its intra-day low against the dollar. Subsequently, it appreciated to close at 42.56/57 as demand tapered off.

Dealers said that the State Bank of India was missing from the market."But the news of the Resurgent India Bond mopping up $2 billion will have a psychological impact and the rupee should appreciate," a dealer in a private bank said. The State Bank of India will launch the bond in August.

FORECAST: The rupee is likely to move in the 42.50-42.60 band on Thursday.

Forward Premiums

Forward premiums hardened marginally on Wednesday as the spot rupee weakened to its intra-day low of 42.61/62. "Near terms came down but six months have become weaker as there was some paying pressure towards the end of the day," dealerssaid. July premiums closed at 16 paise, August at 49 paise and September at 82 paise.

The one-month annualised premium closed at 7.45 per cent (7.5 per cent), the three-month one at 8.8 per cent (8.8 per cent) and the six-month one at 9.6 per cent (9.25 per cent). The one-year annualised premium hardened marginally to close at 10.1 per cent.

There were few import cancellations and some paying pressure after the rupee weakened, dealers said.

The State Bank of India, which was seen receiving on Monday, was not present on Wednesday.

FORECAST: The six-month annualised forward premium is seen in the 9-9.50 per cent band on Thursday.

Gilts

The secondary market for securities remained dull on Wednesday in the absence of adequate enquiries. Most activity was in the near term, especially in securities maturing in 1999 where sellers outnumbered buyers, dealers said.

The wholesale debt market of the National Stock Exchange witnessed trading worth Rs 219.77 crore. The 13.65 per centgovernment security maturing in 1999 was traded for Rs 15 crore at a weighted yield of 9.98 per cent. The 11.55 per cent security maturing in 2001 was traded for Rs 60 crore at a weighted yield of 11.50 per cent. The 14 per cent IDBI non-SLR bond maturing in 2005 was traded for Rs 46 crore at a yield of 13.76 per cent. One repo trade amounting to Rs 10 crore was transacted at a repo rate of 7.25 per cent for 14 days.Total traded value during the week was Rs 474.62 crore.

FORECAST: The secondary market for government securities is likely to remain lacklustre on Thursday.