Call rates opened at 9-9.25 per cent on Wednesday, unchanged from their previous close, and remained at the opening levels throughout the morning. But towards the close, overnight rates eased to 8.50 per cent on market expectations that the Resurgent India Bonds money will be disbursed among banks on Thursday. "Banks are not willing to borrow from the call money market at above 8 per cent as they expect the rates to come down further," dealers said.

There was no inflow by way of reverse repos. The Reserve Bank of India did not receive any application for three-day fixed-rate repos. The Security Trading Corporation of India's turnover was Rs 1,200 crore on a weighted average rate of 8.61 per cent. The NSE's Mibid and Mibor quoted at 9.14 per cent and 9.30 per cent respectively.

FORECAST: Call rates are expected to hover around 7-8 per cent on Thursday.

Gilts

Short-term government securities prices shot up by 8-10 paise on Wednesday on market expectation that the ResurgentIndia Bonds money will be distributed among banks on Thursday. "As banks are officially asked to park RIB proceeds into government securities, their prices are expected to rise further," dealers said. The 11.75 per cent 2001 paper quoted at Rs 100.37-100.40 whereas the 11.55 per cent 2001 paper quoted at Rs 99.97-99.98.

The wholesale debt market of the NSE witnessed trades worth Rs 156 crore (Rs 141.09 crore). The zero coupon government bond maturing in 2000 traded worth Rs 40 crore at a weighted yield of 11.35 per cent.

FORECAST: Short-term gilt prices are expected to rise by 3-5 paise on Thursday.

Spot Dollar

The rupee opened at 42.48/49 against the dollar on Wednesday, unchanged from its previous close. "There was little demand for dollars and exporters sold in the market, expecting the rupee to remain stable," dealers said. During the day, the Indian currency weakened to 42.50/51 owing to little demand for funds. However, excess supply in the afternoon on dollar-selling by corporatescombined with negligible demand saw the rupee appreciate towards the close to 42.46/47. "State Bank of India was reported to have sold dollars in the afternoon, which further increased the supply," dealers said.

FORECAST: The rupee is seen between 42.46 and 42.53 on Thursday.

Forwards Premiums

Forward premiums fell across the board on Wednesday. Near-term premiums fell by 2-4 paise and far-term ones by 6-8 paise owing to receiving by exporters. "Importers are keeping away from the market as they expect the premiums to go down further," said a dealer from a foreign bank

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The six-month annualised premium quoted at 8.53 per cent, three months at 7.79 per cent and one month at 7.48 per cent. The September premium closed at 7/9 paise (10/12 paise), October at 35/37 paise (39/42 paise), November at 63/66 paise (69/74 paise), December at 93/96 paise (100/105 paise), January at 124/127 paise (134/138 paise), February at 154/158 paise, March at 187/192 paise, April at 222/227 paise, May at 256/261paise, June at 291/296 paise, July at 324/329 paise and August at 358/365 paise.

FORECAST: The six-month annualised premium is seen at 8.53-8.60 per cent on Thursday.