The overnight rates quoted slightly firmer on Friday. The rates opened at 6-6.25 per cent and hovered in the 6.10-6.25 per cent band for most part of the day.

"The call rates turned firmer on account of outflows to the extent of Rs 2,500 crore from Thursday's auction of the seven-year 11.95 per cent and the 10-year 12.22 per cent dated stocks," dealers said.

Net outflows from the overnight markets, however, stood at Rs 1,000 crore with Rs 1,500 crore coming in on account of the maturing 5 per cent three-day repos.

The three-day money quoted at 6.25 per cent with financial institutions also striking quite a few deals, dealers said.

The call rates closed higher at 5.75 per cent compared with their previous close of 5.60 per cent. The total turnover of the Securities Trading Corporation of India (STCI) stood at Rs 2,000 crore at a weighted average of 6.06 per cent.

The National Stock Exchange's Mibid was 5.95 per cent with Mibor at 6.18 per cent.

FORECAST: The call ratesare seen in the 5.50-6.25 per cent band on Saturday.

Spot Dollar

The rupee opened at 42.50/52 on Friday compared with its previous close of 42.46/48. According to dealers, the rupee opened weaker owing to continuous buying pressure from corporates to meet month-end commitments.

"Public sector companies were buying to make outward remmittances," a dealer in a private bank said.

The rupee remained rangebound throughout the day, but there was brisk trading.

The rupee touched an intra-day low of 42.55/57 and dealers said that deals also were conducted at 42.56. However, selling by exporters saw the rupee recover to 42.51. It finally closed at 42.52/54.

"The 42.50 level is a psychological barrier and it will take some time to recover to lower levels," a private bank dealer said. The rupee touched an intra-day high of 42.56 and a low of 42.51.

FORECAST: The rupee is seen in the 42.40-42.60 band on Monday.

Forward Premiums

The forward market remained rangebound on Friday."It was a very thin market," a dealer in a private bank said. There was little activity in the forward market, dealers said. Some importers were covering but exporters were receiving also, which kept the forward rupee steady. The Reserve Bank of India stayed away from rolling over its forward commitments. "Importers are paying as these are very attractive rates. But there is no panic," a dealer said.

Importers are covering for September/October and December/January, dealers said. "But exporters are coming and receiving as soon as the premiums go up. So the premiums are stable," a dealer said. The six-month annualised forward cover closed at 7.62 per cent compared with its previous close of 7.6 per cent, the one-month one closed at 4.65 per cent (4.7 per cent) and the one-year one closed at 8.57 per cent (8.5 per cent).

FORECAST: The six-month annualised forward cover is seen in the 7.20-7.60 per cent band on Monday.

Gilts

Active trades were seen in the inter-bank government securitiesmarket on Friday despite slightly tighter call rates. The 11.55 per cent 2001 was traded at a yield to maturity of 11.51 per cent while the 12.22 per cent 2008 was quoted at 12.20 per cent.

The 11.95 per cent 2004 stock issued on Thursday was traded above par at 11.94 per cent after initial bids at par in early morning deals. "There was not much movement in prices...yields are expected to move up in line with the higher coupon offered on the six- and 10-year dated stocks on Thursday," a dealer with a brokerage said. On the National Stock Exchange, trades worth Rs 308 crore were struck, up from Thursday's Rs 257.65 crore.

FORECAST: Dull trades are seen on Saturday with little movement in prices.