The call money market witnessed a steady trend on Thursday owing to adequate liquidity with banks. The call rates opened at 6.25-6.50 per cent, little changed from their previous close. Later, they eased to 6.00-6.25 per cent owing to large offerings by banks. They finally closed at the opening levels of 6.25-6.50 per cent.

The Securities Trading Corporation of India business turnover amounted to Rs 2,300 crore at a weighted average rate of 6.35 per cent, an STCI fund manager said.

The Discount and Finance House of India offered around Rs 2,000 crore, a DFHI source said. Following the general slack trend in the money markets, the gilts were also traded in a narrow range.

FORECAST: The call rates are likely to rule at Thursday's levels on Friday.

Spot dollar

Good corporate demand and an equally good supply from exporters saw the rupee close marginally weaker on Thursday than its previous close. The rupee opened at 42.57/60 and weakened in morning trades to touch itsintra-day low of 42.64, dealers said. "Buying was genuine and a few corporates were seen covering their positions.

Business was conducted at 42.64," a dealer in a private sector bank said. After touching 42.64, the rupee rebounded as exporters entered and sold dollars. This saw the rupee touch its intra-day high of 42.54.

The rupee subsequently closed at 42.57/60. Dealers said that the State Bank of India was seen buying as well as selling in the market.

FORECAST: The rupee is seen in the 42.50-42.60 band on Friday.

Forward premiums

The forward premiums hardened marginally on Thursday as the spot rupee weakened to its intra-day low of 42.64. The six-month forward premium strengthened as the spot rupee gained to close at 9.48 per cent. July premiums closed at 13 paise, August at 45 paise and September at 78 paise.

The one-month annualised premium closed at 7.50 (7.45 per cent), the three-month one at 8.8 per cent (8.8 per cent) and the six-month one at 9.48 per cent (9.6 per cent).The one-year annualised premium hardened marginally to close at 10.16 (10.10 per cent). There were a few import cancellations, but dealers said that there was more receiving pressure than paying pressure. Treasury chiefs had expected the forwards to shoot up because of the $2-billion inflow from the Resurgent India Bond. "But the SBI will swap the dollars with the Reserve Bank of India," a dealer said.

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

Gilts

The secondary market for government securities remained lacklustre on Thursday in the absence of adequate enquiries.

The wholesale debt market segment of the National Stock Exchange witnessed trading worth Rs 235.45 crore. The 11.55 per cent government security maturing in 2001 was traded for Rs 70 crore at a weighted yield of 11.50 per cent. The 13.65 per cent government security maturing in 1999 was traded for Rs 25 crore at a weighted yield of 9.87 per cent. The 364-day treasurybills maturing on July 31, 1998, were traded for Rs 10 crore at a yield of 7 per cent. Two repo trades amounting to Rs 20 crore were transacted at a repo rate of 7 per cent for nine days.

FORECAST: The secondary market for gilts will continue to witness dull trading on Friday.