Call money rates hovered around 8.40 to 8.60 per cent on reporting Friday. "Call rates opened high on volatility at 8 to 10 per cent because of yesterday's overhang, which saw call rates close at a volatile 8.10 to 9 per cent levels," a treasurer said. Opening the day at 8-10 per cent compared to its last close at 9-9.5 per cent, overnight rates touched an intra-day high of 9.25 to 9.75 per cent on some intermittent demand for funds. At close, call rates were seen at 8.25 per cent. "Some stray deals were struck at 7.75 to 8.25 per cent levels", a dealer said. Dealers expect call rates to go lower by 0.25 to 0.50 per cent on account of the `delay' in bond auction announced by the RBI on Friday. "The credit policy measures will release around Rs 4,561 crore in markets tomorrow. However, with the bond auction slated only for November 11, there will be a liquidity overhang for five days, which will put downward pressure on call rates," a dealers with a state-run bank said.

FORECAST: Call rates seen easing to 7.75-8.10 per cent levels on Saturday.

SPOT DOLLARThe rupee remained steady against the dollar in lacklustre trades on Friday. Opening the day at 43.4350/4325, weaker than its previous close at 43.4050/4150, the rupee was seen in a narrow band of 43.4325-4150 during the day. "Markets were in a holiday mood and very few trades were reported during the day. Dollar demand remained range bound. There were also some rumours of some foreign funds selling. However, later in the day, the State Bank of India came up to mop up dollars without any aggressive bidding," a dealer said. At close, the rupee was seen at 43.4150/4175. Cash/spot was quoted higher at 2.5/3.0 paise in line with the higher call rates at above 9 per cent levels. Cash/tom and tom/spot closed at 1.25/1.75 and 0.75/1.50 respectively. The RBI fixed the reference rate for the dollar at 43.43. The rupee ended at 45.3344 to a Euro and 70.75 to a pound sterling.
FORECAST: Rupee seen holding 43.4150 levels on Monday.

FORWARD PREMIUMS

The monthly forward premiums tracked the spot rupee and ended flat in dull trades on Friday. "Forward premiums showed no movement, and importers stayed away from the market, except for routine remittances, while some exporters were keen on hedging receivables before premiums fell further", dealers said. The six-month annualised premium ended at around 5.00 per cent. Premiums have been southbound after the Reserve Bank announced a two-stage 1 percentage reduction in the cash reserve ratio (CRR) on 29 October. "There was cancellation of export hedges on the near-end, but it was too marginal to impact the premiums," a dealer said. The monthly premiums (in paise) were 9/10 for November, 24/25 for December, 44/45 for January, 61/62 for February, 81/83 for March, 99/101 for April, 119/121 for May and 139/141 for June.
FORECAST: Six month annualised forward premiums seen at 5 per cent on Monday.

GILTS

Bond prices displayed some weakness on Friday on account of the Rs 4,561 crore inflow expected on Saturday because of the cash reserve ratio (CRR) cuts. Security prices fell by 3-4 paise on lack of buying support from players, who are anticipating liquidity overhang in the markets due to the `delay' in bond auction. The 11.98 per cent 2004 was traded at Rs 104.004 (104.044), 11.75 per cent 2006 was dealt at Rs 102.953 (102.992) and 12.32 per cent 2011 at Rs 103.782 (103.832). Expectations of a cash reserve ratio (CRR)-induced liquidity aided buyers to build fresh positions on the expectations of booking profits in the coming days. "A rally was checked by firm call rates and some profit-taking", a dealer with a primary dealership said. The first stage of the Reserve Bank's CRR cut due on November 6 will infuse Rs 4,561 crore.
FORECAST: Bond prices seen at moderately lower levels on Saturday.

-- Compiled by Paramvir Singh