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FE NEWS SERVICE
Call Money
Call rates remained rangebound on Monday and moved in a narrow band of 9-9.10 per cent. Overnight rates opened at 9-9.10 per cent, unchanged from their previous close. The rates ruled at the opening level throughout the day and closed at 9 per cent. "Lacklustre demand for funds is keeping call rates firm above the repo level," dealers said. According to dealers, call rates are expected to remain above the 9 per cent level throughout the week. At present, around Rs 3,000 crore is locked in the Reserve Bank of India fixed-rate repos. The total inflow into the system on Monday through three-day fixed-rate repos was Rs 2,353 crore while the outflow was to the tune of Rs 3,000 crore.
FORECAST: Call rates are seen in 9-9.25 per cent band on Tuesday.
Spot Dollar
The spot rupee moved in a 4 paise band on Monday. The rupee opened at 42.28/29 against the dollar, unchanged from its previous close.
Throughout the morning, the Indian currency ruled at 42.28/29 owing to dulltrading. The rupee strengthened in the afternoon by 2 paise to 42.26/27.
"The rupee strengthened by 2 paise owing to negligible demand for dollars and sufficient supply coupled with lack of buying interest from corporates," a dealer from a foreign bank said. The rupee finally closed at this level. "The State Bank of India regularly controls the rupee movement and supports the rupee from appreciating by artificially creating a demand. However, SBI was not present in the market on Monday," dealers said.
FORECAST: The spot rupee is seen between 42.26-42.38 on Tuesday.
Forward Premia
Forward premiums softened across all maturities on Monday owing to marginal receiving by exporters and lack of paying interest from importers. Near-end premiums fell by 2-4 paise and far-end ones by 6-8 paise. "Importers are not willing to pay at the existing levels as they expect forwards to dip further," dealers said. The six-month annualised premium quoted at 7.7 per cent (8 per cent), three months at 7per cent (7.7 per cent) and one month at 5.7 per cent (5.7 per cent). October premium quoted at 1-3 paise (2-3 paise), November at 20-22 paise (22-24 paise), December at 44-46 paise (50-52 paise), January at 73-75 paise (79-83 paise), February at 101-103 paise (110-130 paise), March at 130-133 paise (142-145 paise), April at 161-164 paise (174-179 paise), May at 199-203 paise (207-211), June at 230-237 paise (240-244 paise), July at 263-267 paise (272-277 paise), August at 303-307 paise (307-310 paise) and September at 334-338 (338-342 paise).
FORECAST: The six-month annualised premium is seen at 7.7-8 per cent on Tuesday.
Gilts
Prices of short-term government securities firmed up by 3-5 paise on Monday owing to marginal buying interest in short-dated gilts. "Sentiments in the gilt market has improved as it expects some positive measures in the forthcoming credit policy," dealers said. The improved sentiment saw marginally higher trades in short-dated securities. The 11.40 per cent 2000paper traded at Rs 99.97 (Rs 99.94), the zero coupon 1999 paper at Rs 97.72-Rs 97.75 (Rs 97.69) and the 11.64 per cent 2000 paper at Rs 100.35 (Rs 100.32). 91-day treasury bills maturing on January 23 offered a yield of 10.10 per cent. The wholesale debt market of the NSE witnessed trades worth Rs 302.49 crore. The 11.10 per cent government loan maturing in 2003 actively traded worth Rs 50 crore at a weighted yield of 11.81 per cent. The 11.40 per cent government loan maturing in 2000 traded worth Rs 40 crore at a weighted yield of 11.42 per cent.
FORECAST: Short-term gilt prices are expected to firm up by 2-3 paise on Tuesday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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