Call rates ruled easy on Wednesday owing to availability of sufficient funds as state loan oversubscription to the tune of 1,204.95 crore was refunded to banks. Overnight rates opened at 8.50-8.60 per cent, 10 basis points higher than their previous close of 8.50 per cent. Towards the close, the rates tightened marginally by 10 basis points owing to slightly higher demand. Call rates closed at 8.60-8.70 per cent.

The Reserve Bank of India accepted two applications worth Rs 57 crore for its three-day 8 per cent fixed-rate repos for parties holding SGL and current accounts. According to dealers, call rates are expected to rule easy around 8-9 per cent throughout the week as no major outflow is expected during this period. The NSE's 14-day Mibid and Mibor quoted at 8.89 per cent and 8.58 per cent.

FORECAST: Call rates are seen at 8.25-9 per cent on Friday.

Spot Dollar

The rupee remained stable on Wednesday. The Indian currency moved in a narrow 2 paise band against thedollar. The rupee opened at 42.53/54 compared with its previous close of 42.53.50/54.50. The rupee moved in a thin 42.52/54 range throughout the day owing to lacklustre demand for funds.

Marginal receiving by exporters towards the close saw the rupee strengthen by 1 paise to close at 42.52/53. "The State Bank of India was not present in the market," dealers said. According to forex dealers, the rupee is expected to remain stable this week as no major inflows or outflows are expected. "The rupee is ruling stable as there is no month-end demand," dealers said. The Reserve Bank of India reference rate for the dollar was Rs 42.54 (Rs 42.53).

FORECAST: The rupee is seen between 42.50 and 42.60 on Thursday.

Forward Premiums

Forward premiums remained stable on Wednesday. Premiums across all maturities eased by 1-2 paise towards the close owing to marginal receiving by exporters. The six-month annualised cover closed at 7.25 per cent (7.3 per cent), three months at 5.9 per cent (5.9 per cent)and one month at 5 per cent (5.05 per cent).

January premium closed at 12-14 paise (13-16 paise), February at 32-36 paise (33-37 paise), March at 56-61 paise (58-63 paise), April at 87-92 paise (89-94 paise), May at 116-121 paise (119-123 paise), June at 146-151 paise (148-152 paise), July at 175-181 paise (178-183 paise), August at 208-211 paise (210-213 paise), September at 252-256 paise (253-257 paise), October at 276-281 paise (278-283 paise), November at 306-309 paise (308-311 paise) and December at 340-344 paise (342-346 paise).

FORECAST: The six-month annualised premium is seen at 7-7.6 per cent on Thursday.

Gilts

Prices of government securities remained stable on Wednesday owing to lack of buying or selling interest. The zero coupon 1999 paper quoted at Rs 99.52, the 11.40 per cent 2000 paper at Rs 100.11 (Rs 100.11) and the 11.55 per cent 2001 paper at Rs 100.10 (Rs 100.10). "Most traders are not taking any new positions currently," a dealer said.

The wholesale debt market ofthe NSE witnessed trades worth Rs 377.15 crore compared with the previous peg of Rs 405.24 crore. The 11.40 per cent government loan maturing in 2000 traded worth Rs 63 crore at a weighted yield of 11.31 per cent. The government loan maturing in 2000 traded worth Rs 55 crore at a weighted yield of 11.29 per cent. Commercial papers of Nicholas Piramal maturing on February 4, 1999, traded worth Rs 5 crore at a yield of 10.20 per cent.

FORECAST: Gilt prices are seen stable on Friday.