The call rates ruled steady on Monday. "Trading was dull," a dealer said. The overnight rates opened at 9.25-9.5 per cent and moved in a narrow range between 9.00 and 9.30 per cent throughout the day. The rates finally closed at 9.00-9.15 per cent, marginally easier than their previous close of 9.00-9.50 per cent.

Dealers said the rates held steady as there was enough supply of funds to meet the demand. At the three-day fixed-rate repos, the Reserve Bank of India mopped up Rs 2,800 crore. The total turnover of the STCI was pegged at Rs 1,600 crore. At the NSE, the Mibid rate quoted at 9.10 per cent and the Mibor at 9.30 per cent.

FORECAST: The call rates are likely to hover around Monday's levels on Tuesday.

DEBT MARKET

The government securities market remained dull on Monday with action concentrated in short-term securities. "As there were tax outflows of at least Rs 7,000 crore this fortnight, everyone wants to remain liquid," said a dealer from a primarydealership.

The tax outflows are expected to offset the liquidity on account of the Resurgent India Bonds inflows. In the wholesale debt market segment of the NSE, the 364-day treasury bills maturing on September 25 traded worth Rs 10 crore at 8.6 per cent and the zero coupon security maturing in 1999 traded worth Rs 25 crore at 10.67 per cent. Among the other securities that were traded were the medium-term 10.85 per cent gilt maturing in 2001 worth Rs 30 crore and the 11.10 per cent gilt maturing in 2003 worth Rs 20 crore.

FORECAST: Yields are unlikely to ease significantly on Tuesday.

Spot Dollar

The rupee held steady on Monday owing to dull trades and little corporate interest in the dollar. The Indian currency opened at 42.51/52, little changed from its previous close of 42.49/50, and moved in a fine 3 paise band throughout the day.

"Trades were dull and volumes low," said a dealer in a brokerage. Dollar sales, coupled with lacklustre corporate demand, saw the rupee quote briefly at anintra-day high of 42.49/50. Renewed greenback interest from a few state-run corporates and banks in later trades saw the local currency close a shade weaker at 42.50/51. State Bank of India reportedly bid for the dollar in afternoon trades.

Cash/spot finished at 0.50/150 paise and cash/tom at 0.25/0.75 paise. Elsewhere, the Reserve Bank of India pegged its reference rate for the dollar at 42.49 compared with its previous peg of 42.51.

FORECAST: Rupee is seen steady between 42.49 and 42.53 on Tuesday.

Forward Premiums

Forward premiums inched up a bit from their opening levels on Monday on slight corporate paying-pressure in a thin market. Near-term premiums closed firmer by 1-4 paise over their early morning quotes. October premiums closed at 41/44 paise (39/43 paise), November at 70/74 paise (70/73 paise), December at 101/105 paise (100/105 paise) and January at 134/138 paise (131/136 paise).

"Quotes on the bid side moved up marginally higher than on the offer side.... Banks were also seendoing sell/buy swaps," said a dealer with a European bank. "A few corporates are finding it attractive to pay at the current levels," dealers said. Long forwards also quoted a shade higher with May premiums ending at 268/273 paise (265/270 paise) and June at 303/308 paise (302/305 paise). The six-month annualised forward premium finished at 8.75 per cent (8.54 per cent).

FORECAST: The six-month annualised forward premium is seen at 8.69-8.75 per cent on Tuesday.