Call rates firmed up on Monday owing to demand for funds on account of advance tax outflows. Call rates, after remaining steady around the repo rate of 8 per cent for a while, closed higher at 8.20-8.40 per cent.

Call rates opened at 8.10-8.30 per cent, moved in a range of 8.10-8.50 per cent and closed at 8.20-8.30 per cent with most deals struck at 8.25-8.35 per cent, dealers said.

Overnight rates are expected to firm up further owing to corporate tax outflows, but thereafter ease somewhat as the reporting Friday approaches, they added.

The current week may witness tightening of liquidity owing to expected outflows of around Rs 5,000 crore on account of advance tax payments and another Rs 1,000 crore may leave the system on account of treasury bills auction, sources said.

FORECAST: Call rates may rise further on Tuesday.

Spot Dollar

The rupee stayed unmoved against the dollar in a dull forex market on Monday. The Indian currency opened at 42.57/58, unchanged fromits previous close, and fell a paise lower on the bid side. But the rupee kept from breaching the 42.60 mark.

"There was little demand for dollars from corporates and banks. Year-end sentiment also affected demand for dollars," a dealer with a European bank said. At the close of trading, the rupee gained from its opening level to 42.56/57.

Cash/spot ended at 0.50/1.00 paise, cash/tom at 0.00/0.25 paise and tom/spot at 0.25/0.50 paise. The Reserve Bank of India maintained its reference rate for the dollar at Rs 42.59.

FORECAST: The rupee is seen at 42.55/42.59 on Tuesday.

Forward Premiums

Forward dollar quotes remained steady on Monday with little booking by importers and corporates. "There was little activity till the afternoon... Paying interest was more than met with that on the receiving side," a dealer with a brokerage said.

In the near terms, December premiums quoted at 5-7 paise (6/8 paise), January 26-28 paise (27/28 paise), February 49-52 paise (50/52 paise) and March 79-82paise (80/82 paise). The far forwards quoted unchanged with April at 112-115 paise, May at 143-146 paise and June at 174-177 paise. The six-month annualised premium ended at 7.51 per cent, down from its previous close of 7.65 per cent, and the one-year premium closed at 8.38 per cent (8.31 per cent).

FORECAST: The six-month premium is seen at 7.55-7.60 per cent on Tuesday.

Gilts

The secondary market for government securities remained subdued in the absence of market-moving factors on Monday. But short-dated papers saw mild selling and softened by 1-2 paise. The wholesale debt market of the NSE witnessed trades worth Rs 237.75 crore. The 11.55 per cent 2001 traded worth Rs 65 crore at a weighted yield of 11.49 per cent. The 13.25 per cent 2000 traded worth Rs 40 crore at a weighted yield of 11.18 per cent.

Commercial paper of Madras Cements maturing on February 12, 1999, traded worth Rs 5 crore at a yield of 10.30 per cent. The NSE Mibid rates for overnight, 14-day, one month and threemonths quoted higher at 8.21 per cent, 8.55 per cent, 9.17 per cent and 10.23 per cent respectively. The NSE Mibor rate for the above categories quoted at 8.35 per cent, 9.05 per cent, 9.86 per cent and 10.94 per cent respectively.

FORECAST: Short-dated gilts may see hectic trading on Tuesday.