Call money rates ruled easy and hovered around the repo level of 8 per cent on Tuesday owing to comfortable liquidity conditions in the system. The overnight rate opened at 8-8.05 per cent against the previous close of 7.90-8 per cent. Throughout the day, the rates moved in a narrow range of 8-8.05 per cent to finally close at 8 per cent. Money market dealers said that call rates are expected to move around the repo level due to comfortable liquidity in the system. The total outstanding in repo is close to Rs 4,000 crore. As against the total outflow of Rs 3,752 crore on Monday, only Rs 8 crore went into the system. About Rs 355 crore came into the system through repo reversal. The NSE's overnight Mibid and Mibor were quoted at 8.02 per cent and 8.09 per cent whereas the 14-day Mibid and Mibor were quoted at 8.3 per cent and 9.02 per cent respectively.

FORECAST: Overnight call rates are expected to move in a band of 8-8.10 per cent on Wednesday.

Spot Dollar

The spotrupee moved in a narrow 2 paise band throughout the day. The Indian currency opened at 42.28/30 against the dollar, unchanged from its previous close. "Dull trading in the spot rupee kept the rupee stable between 42.28/30 against dollar throughout the day," forex dealers said. According to dealers, due to negligible demand for dollars coupled with sufficient supply in the system is keeping the spot rupee stable. Throughout the day, the rupee was hovering in a range of 42.28-42.30 against dollar before it finally closed at 42.28/29 against the dollar. The rupee is expected to remain stable between 42.26-42.38 against the dollar during this week due to stable conditions existing in the forex market. The RBI fixed the dollar reference rate, two paise higher at Rs 42.29 against the previous fix of Rs 42.27.

FORECAST: The rupee is seen in a band of 42.26-37 on Wednesday.

Forwards Premiums

The forward premium across all maturities moved in a narrow range of 1-4 paise on Wednesday. The near-endforward premium softened by 1-2 paise and far-end fell by 1-4 paise compared with their previous close. The six month annualised premium closed at 7.2 pr cent (7.5 per cent), three-months at 6.2 per cent (6.35 per cent) and one-month at 5.2 per cent (5.35 per cent). The November premium was quoted at 6-8 paise (8-9 paise), December at 24-27 paise (26-28 paise), January at 50-53 paise (52-54 paise), February at 76-79 paise (80-82 piase), March at 108-110 paise (110-114 paise), April at 137-140 paise (141-144 paise), May at 164-169 paise (172-174 paise), June at 193-198 paise (200-203 paise), July at 226-230 paise (230-234 paise), August at 254-259 paise (260-264 paise) and September at 286-291 paise (290-295 paise).

FORECAST:The six-month annualised premium is seen between 7.4-7.6 per cent on Wednesday.

Gilts

The trades were subdued in the government securities market on Tuesday with activities confined to only in short-dated bonds. Short-dated gilts prices fell by 2-5 paise on Tuesdayowing to profit taking by a few banks. "Selling interest was seen in securities maturing in 1999 and 2000 papers," dealers said.

According to market dealers, buyers are not willing to buy securities at the existing rates. The zero coupon 1999 paper was traded at Rs 97.22 and 12 per cent 1999 paper was traded at Rs 100.71 and 11.40 per cent at Rs 100.10. The total traded value at the WDM segment of the NSE was Rs 477.73 crore as against Rs 407.31 crore on Monday. The 11.98 per cent government loan maturing in 2004 was traded worth Rs 40 crore. The zero coupon government bond maturing in 2000 was traded worth Rs 35 crore at a weighted yield of 10.86 per cent. FORECAST: Short-dated gilts are expected to remain stable on Wednesday.