Call rates ruled firm around the repo rate on Wednesday. Overnight rates opened at 8-8.10 per cent and moved in a narrow range of 7.90-8.10 per cent throughout the day before closing steady at 8-8.05 per cent. There was ample liquidity and comparatively lower demand for funds in the market, dealers said. Outflow through three-day repos was Rs 141 crore, dealers said. The DFHI extended a market support of Rs 2,700 crore.

The STCI quoted at slightly lower rates of 7.90-8 per cent. The NSE overnight Mibid rates, 14-day, one month and three months quoted at 8 per cent, 8.41 per cent, 8.96 per cent and 10.05 per cent respectively. The NSE Mibor rates for the above categories were 8.06 per cent, 8.90 per cent, 9.67 per cent and 10.87 per cent respectively.

FORECAST: Call rates are seen at 8-8.10 per cent on Thursday.

Spot Dollar

The rupee closed steady against the dollar in an extremely quiet forex market on Wednesday. The Indian currency opened at 42.57/58 and weakened to42.58/59 during mid-session.

However, in the absence of major demand for dollars from corporates as well as leading commercial banks, the rupee strengthened and closed steady at Rs 42.5650/5750. According to dealers, the State Bank of India quoted lower than the market rate. The rupee, which saw some weakening in the opening hour, strengthened to its opening level on the State Bank of India's presence, they said. Cash spot quoted at 1.50-2.00 paise.

FORECAST: The rupee is seen at 42.55/42.60 on Thursday.

Forward Premium

Forward premiums came down marginally in the absence of paying pressure on Wednesday, dealers said. Monthly premiums in paise closed at December 9-11 paise, January 29-32 paise, February 53-56 paise, March 83-86 paise, April 116-120 paise, May 147-151 paise, June 178-182 paise, July 211-216 paise, August 245-250 paise, September 279-284 paise, October 312-317 paise and November 345-351 paise.

The six-month annualised premium quoted at 7.55 per cent while the one-yearannualised premium closed at 8.38 per cent. Dealers said paying pressure seen earlier in the week was not sustainable and thus the forward rupee had to strengthen.

FORECAST: The six-month premium is seen at 7.50-7.8 per cent on Thursday.

Gilts

The government securities market was quiet on Wednesday and saw very few deals. Dealers said the rally that took place before the auction of the three-year paper has fizzled out. "Banks which took positions expecting a rally in medium-term securities now have to hold on to their securities as prices have crashed," a dealer with a brokerage house said. Most deals were struck in treasury bills maturing in January, dealers said.

Trades in these bills were struck between 8.60 per cent and 8.95 per cent. Other traded securities included the 11.40 per cent gilt maturing in 2000 and the 11.55 per cent gilt maturing in 2001. Both these securities are currently market favourites.

FORECAST: Trading may be concentrated in treasury bills onThursday.