The call market remained closed on Thursday. Call rates had opened firm on Monday at 9.75 per cent owing to demand-supply mismatch. Tight money conditions on advance tax outflows to the tune of Rs 5,000 crore kept call rates firm.

On Monday, the Reserve Bank received Rs 6 crore through three-day 8 per cent fixed-rate repos. On Tuesday, call rates eased by 125 basis points to 8.50 per cent as the RBI refunded the oversubscription worth Rs 1,204.95 crore received during the state loan auction. The central bank on Tuesday mopped up Rs 180 crore through three-day repos. On Wednesday, overnight rates opened at 8.50-8.60 per cent. Later the rates tightened marginally by 10 basis points owing to slightly higher demand and closed at 8.60-8.70 per cent.

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

Spot Dollar

The rupee strengthened by 6 basis points on Thursday to close at 42.47/48 against the dollar. According to forex dealers, the Indian currency strengthenedon excess dollar supply. "As the Reserve Bank clearing house was closed on Thursday, no remittances were made which resulted in increased dollar supply," dealers said.

The rupee opened at 42.51/52, 1 paise higher than its previous close of 42.52/53. According to dealers, high month-end demand and the fact that no outward remittances were made saw the rupee inch upward. The RBI reference rate for the dollar was Rs 42.48 against the previous peg of Rs 42.54. The rupee is expected to rule around 42.46 this week.

FORECAST: The rupee is seen between 42.46 and 42.58 on Friday.

Forward Premiums

Forward premiums remained stable on Thursday despite a 6 paise appreciation of the spot rupee. 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 Friday.

Gilts

The government securities market remained closed on Thursday. However, a few short-dated papers quoted for Friday's value, dealers said. The zero coupon 2000 paper maturing on February 10 quoted at Rs 89.32 while the zero coupon 2000 paper maturing on July 13 quoted at Rs 84.55. Gilt prices 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). The wholesale debt market of the NSEwitnessed trades worth Rs 377.15 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. 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.