Call rates remained rangebound on Tuesday. Overnight rates opened at 9.20-9.25 per cent, unchanged from their previous close of 9.25-9.30 per cent.

"The absence of demand for funds kept call rates stable," a dealer from a nationalised bank said. According to dealers, most banks have already taken positions much ahead of the reporting Friday this week owing to public holidays on Wednesday and Thursday. The rates eased to finally close at 8.75 per cent owing to marginal demand in the afternoon. "Most traditional lenders are not lending in the call money market as they have exhausted surplus funds," dealers said. The repo outstanding in the system has also come down to Rs 425 crore from Rs 1,500. There was no inflow into the system.

FORECAST: Call rates are seen at 7.75-8.25 per cent on Friday.

Spot Dollar

The spot rupee moved in a narrow range of 2 paise against the dollar on Tuesday owing to lacklustre trading in a thinly-traded market. The Indian currency opened at42.30/31, unchanged from its previous close.

"There is no demand for dollars as importers are of the view that the Indian currency will strengthen further and even the supply is restricted to a small quantum," dealers said. The rupee remained stable at its opening level throughout the day. However, it strengthened by 1 paise to an intra-day low of 42.29/30 to finally close at this level. The State Bank of India did not actively trade in the market. According to dealers, most players in the forex market are adopting the wait-and-watch attitude before the credit policy.

FORECAST: The rupee is seen stable at 42.28/38 on Friday.

Forward Premia

Near-term forward premiums softened by 1-2 paise and far-end ones by 2-4 paise on Tuesday compared with their previous closing levels.

Premuims opened a little lower than their previous closes, firmed up by 2-3 paise, and finally closed at their opening levels. The six-month annualised premium quoted at 7.25 per cent, three months at 7.35 percent and one month at 7.10 per cent. The October premium quoted at 13-17 paise, November at 21-24 paise, December at 46-49 paise, January at 74-78 paise, February at 103-107 paise, March at 135-139 paise, April at 168-172 paise, May at 200-204 paise, June at 232-237 paise, July at 264-269 paise, August at 296-301 paise and September at 328-333 paise.

FORECAST: The six-month annualised premium is seen at 7.23-7.28 per cent on Friday.

Gilts

Short-term gilt prices moved in a 1-3 paise range on Tuesday in a thin market. "Most banks are not increasing their investment commitment as they are unable to take a view on the interest rate movement," dealers said. Trades were seen in the 91-day treasury bills maturing on January 16 at a yield of 10.05 per cent. A few trades were also seen in the 11.40 per cent 2000 paper which quoted at Rs 99.93-99.94 (Rs 99.92) and the zero coupon 1999 paper at Rs 97.53. The wholesale debt market of the NSE witnessed trades worth Rs 159.44 crore. The zero coupongovernment bond maturing in 1999 traded worth Rs 15 crore at a weighted yield of 10.36 per cent. The 14 per cent non-SLR bond of IDBI maturing in 2005 traded worth Rs 25 crore at a weighted yield of 14.09 per cent.

FORECAST: Short-term gilt prices are seen stable on Friday.