Call rates ruled between 8.4 per cent and 8.75 per cent levels on Monday. Opening the day at 8.5-8.75 per cent, call rates were seen holding 8.5 per cent levels for most of the day. "Demand for funds was moderate given that we are headed for reporting Friday. A few deals done at 8.75 per cent thereabouts", a dealer with a brokerage said.

At close of trades today, call rates had eased to 8.25-8.50 per cent. Inflows in the second half of the current fortnight include Rs 474.26 crore by way of interest payments on the 11.75 per cent 2001 on 25 August and Rs 138.5 on the 13.85 per cent 2006 on the next day. The National Stock Exchange pegged its overnight Mibid and Mibor at 8.70 per cent and 8.91 per cent with the fortnightly one at 9.91 per cent and 9.57 per cent.

Forecast: Call rates seen at 8.50-8.0 per cent levels on Tuesday.

Spot Dollar

The rupee finished at stronger at 43.51/52 on Monday following Reserve Bank governor, Bimal Jalan's statement that the central bank wasprepared to intervene directly or sell dollars through the State Bank in order to augment dollar supplies. "The rupee opened the day at 43.4950/5150 from its Friday's close at 43.5650/5750 as the statement came ahead of trades today", dealers said.

The rupee held these levels for most of the day and closed nearer to opening quote. Cash/spot quoted 0.75/1 paise (2.25/2.50 paise), cash/tom at 0.3750/0.50 paise (1.75/2 paise) with tom/spot also at 0.350/0.50 paise (0.50/0.6250). The Reserve Bank pegged its reference rate for the dollar at 43.55 as against it previous 43.47. The euro opened at 46.45 (46.12) against the rupee, went to a high of 46.46 (46.53) before closing at 45.24 (45.48).

Forecast: Rupee seen between 43.49 and 43.52 levels on Tuesday.

Forwards Premiums

Forward premiums quoted softer on Monday. The six-month annualised forward cover finished at 5.09 per cent (4.99 per cent). January dollars quoted 90/92 paise (96/98 paise) with February at 106/108 paise (112/114 paise). "ReserveBank governor, Bimal Jalan's statement that the central bank was prepared to intervene directly or sell dollars through the State Bank in order to augment dollar supplies", dealers said, adding: "Jalan's reference that the Reserve Bank was ready to take care of Indian Oil's dollar needs calmed the market".

Demand for dollars from state-run entities, including IOC had taken the rupee lower to 43.5650/5750 on Friday, lower from its Thurday's closing at 43.49/50. "There was a bit of inter-bank receiving today. Importers could come in after go still softer. Lower call rates at 8.5 per cent levels also helped premiums go softer" dealers said.

Forecast: Six-month annualised forward cover seen a shade 4.9 per cent on Tuesday.

Gilts

Bond prices fell on Friday. The 12.5 per cent 2004 was dealt between at Rs 105.49 and Rs 105.51 (Rs 105.51-105.54) with the 11.5 per cent 2004 at Rs 102-101.03. "Bond prices were fell a shade, and held almost when compared to their Saturday finishes", a bond dealer with aprimary dealership said. The 12.32 per cent 2011 was dealt at Rs 103.62 (Rs 103.64 levels) with the 11.90 per cent 2007 unchanged at Rs 102.85. "Lower call rates did not lead to rally in bond prices. There could be a mild rally on Tuesday though", dealers said.

Forecast: Bond prices are seen a shade firmer on Tuesday.