The overnight call money rates recorded an intra-day high of 11.25 per cent on Wednesday as against the previous high of 11.50 per cent. The call rates opened at 11-11.25 per cent slightly lower compared with their previous close of 11.50 per cent.

Throughout the day, the rates ruled high between 10.50-11.25 per cent owing to high demand for funds in tight liquidity conditions. "Most banks are building up their CRR products much ahead of reporting Friday in expectation of a hike in call rates after the advance tax outflow to the tune of Rs 1,200 crore through cross holding between oil companies," dealers said. The call rates finally closed lower at 9.50 per cent as demand for funds eased towards the close. The Reserve Bank of India did not receive any application for a four-day fixed rate repo in government of India dated securities for parties holding SGL and current account.

FORECAST: The call rates seen between 9.50-11.50 per cent on Friday.

Spot Dollar

The spot rupeeruled rangebound on Wednesday. The Indian currency strengthened to an intra-day high of 42.415 against dollar during the day. The Indian currency opened at 42.43 against dollar, four paise weaker compared with their previous close of 42.39 against dollar.

Throughout the day, the Indian currency moved in a narrow 3 paise range between 42.41/43 against dollar. The Indian currency strengthened to an intra-day high of 42.415 during the day to finally settle at 42.415/42 against the dollar. "There was marginally higher supply in the system due to interbank selling in a lacklustre market," forex dealers said. Meanwhile, the Indian currency opened at 46.56 against euro, ruled between 46.53/70 against euro during the day to finally settle at 46.50 against euro. FORECAST: Rupee seen ruling between 42.36 and 42.45 on Friday.

Forward Premium

Forward premiums across all maturities firmed up by 3-4 paise on Wednesday towards the opening when the call rates touched an intra-day high of 11.25 per cent.However, the premiums eased by 5-8 paise after call rates eased to 9.50 per cent. "Lot of receiving was seen in the later part of the day which eased the opremiuns," dealers said.

The six month annualised premium was quoted at 7.3 per cent (7.5 per cent), three months at 7.5 per cent (7.85 per cent) and one month at 8.4 per cent (9.25 per cent). In the near forwards, March closed at 8-9 paise (13.50-14.50), April at 34-36 paise (42-44 paise), May at 57-59 paise (64-66 paise), June at 83-86 paise (91-93 paise), July at 109-111 paise (115-117 paise), August at 135-137 paise (140-142 paise), September at 160-163 paise (165-167 paise), October at 188-191 paise (194-196 paise), November at 218-221 paise.

FORECAST: Six-month annualised forward seen at 7.2-7.4 per cent on Friday.

Debt Market

The government securities prices declined across the board by 3-5 paise towards the opening as call rates tightened to 11.25 per cent. However, after overnight call rates eased to 9.50 per cent, gilts pricesrecovered by 8-10 paise.

The 11.55 per cent 2001 paper was quoted at Rs 100.68 in the morning. However, towards the close it quoted at Rs 100.82. 11.40 per cent 2000 paper quoted at Rs 100.71 (Rs 100.68), 11.98 per cent 2004 paper at Rs 99.54, 11.50 per cent 2004 paper at Rs 99.65, 11.15 per cent 2002 paper at Rs 99.68, 11.47 per cent 2001 paper at Rs 100.47, 12.25 per cent 2008 paper at Rs 101.40.

FORECAST: Gilts prices are expected to rule steady on Friday.