Call rates opened at 8.25-8.50 per cent on Monday compared with their previous close of 8-8.5 per cent. Overnight rates ruled at 8.25-8.50 per cent throughout the morning. However the rates eased in the afternoon and finally closed at 7-7.25 per cent. The fall in the rates was on the account of high-value cheque clearings. The total outstanding in repos is Rs 3,500 crore, dealers said. The total outflow on Monday was Rs 2,350 crore through the RBI fixed-rate repos while the inflow was a marginal Rs 160 crore. About Rs 1,725 crore is expected to enter the system on Tuesday riding on the RBI repos. According to an I-Sec report, the issuance of the 20-year on-tap stock and gross inflows of about Rs 2,500 crore are expected to hold call rates at 8.25-8.75 per cent.

FORECAST: Call rates are seen at 8-8.25 per cent on Tuesday.

Spot Dollar

The spot rupee weakened to an intra-day low of 42.41/43 against the dollar on Monday owing to marginal corporate demand.

The Indiancurrency opened at 42.39/40, unchanged from its previous close. The rupee weakened by 3 paise in the afternoon owing to dollar demand."A few banks bought on behalf of corporates which saw the rupee slip," dealers said.

During the week, the rupee is expected to remain rangebound between 42.35 and 42.45 owing to a lacklustre demand for funds, dealers said.

"We do not expect any significant pressure on the rupee this week," dealers said.

The RBI's reference rate for the dollar was pegged at Rs 42.38 (Rs 42.40).

FORECAST: The rupee is seen at 42.35-42.45 on Tuesday.

Forward Premiums

Forward premiums opened 2-3 paise lower on Monday compared with their previous closing levels. Forwards closely tracked the spot rupee during the day. Near-end premiums firmed up by 1 paise while far-end ones rose by 3-4 paise. "Premiums across all maturities moved up when the spot rupee weakened by 3 paise in the afternoon. Marginal covering by importers was seen," dealers said.

The six-month annualisedcover closed at 7.55 per cent, three months at 5.95 per cent and one month at 4.52 per cent. The November premium quoted at 5-8 paise, December at 17-19 paise, January at 39-42 paise, February at 65-69 paise, March at 101-104 paise, April at 132-136 paise, May at 164-167 paise, June at 195-199 paise, July at 226-231 paise, August at 257-262 paise, September at 287-292 paise and October at 317-322 paise.

FORECAST: The six-month annualised cover is seen at 7.4-7.6 per cent on Tuesday.

Gilts

Prices of short-term government securities remained stable on Monday.

"A small section of players was seen selling the 11.40 per cent 2000 paper," dealers said. The 11.40 per cent 2000 paper traded at Rs 112-113 while treasury bills maturing in January traded at 9.25 per cent. The wholesale debt market of the National Stock Exchange witnessed trades worth Rs 519.01 crore. The 11.40 per cent government loan maturing in 2000 traded actively worth Rs 165 crore at a weighted yield of 11.32 per cent. The11.50 per cent government loan maturing in 2004 traded worth Rs 25 crore at 11.98 per cent. Reliance Capital's zero coupon debentures maturing in 2002 traded worth Rs 34 crore at a weighted yield of 15.90 per cent. Grasim's commercial paper traded worth Rs 35 crore at a yield of 10.55 per cent.

FORECAST: Gilt prices are seen stable on Tuesday.