SPOT DOLLAR
The rupee ended steady on Friday. The rupee opened at 43.50/51, unchanged from Thursday's closing levels, and finished at the same levels. Dealers said there was dollar demand in pre-mid session trades, but this faded away as remittances-in main from the Gulf countries hit the market in the afternoon. Dealers said corporates which had availed of foreign currency non-resident (FCNR-B) loans for near terms without hedging their exposures, indicating a view the rupee was likely to be stable. "The rupee's movement will also depend on the foreign investor flows," a dealer at a forex brokerage said. Foreign institutional investors (FIIs) have been net sellers during January to the tune of $84.3 million. Dealers attribute this as one of the causes for the rupee's fall this week from a high of 43.49 oN Monday. Cash/spot ended at 1/1.25 paise, cash/tom at 0.25/0.5 paise with tom/spot at 0.25/0.375 paise.
FORECAST: Rupee seen steady on Monday.

FORWARD PREMIUMS
Forward premiums came off their initial highs on receiving particularly in the near maturities. The six-month premium ended at an annualised 3.89 per cent compared to Thursday's close of 3.96 per cent. Dealers said there was paying by some large banks in the morning, which led to a rise in premiums. "This was neutralised by receivings and cancellation of import hedges in the anticipation of a stable rupee," a state-run bank dealer said. Dealers said that the rise of premiums in the morning was influenced also by feeling of tighter liquidity conditions after the bond auction on Saturday."Premiums were slightly volatile, but not as much as yesterday," a dealer at a foreign bank said. The government will re-issue the 11.83 per cent 2014 government stock for a notified amount of Rs 5,000 crore through a price-based auction on January 8. "Steady call rates did not influence forward premiums.
FORECAST: Forward premiums seen higher on Monday.

GILTS
Bond prices eased on Friday as players off-loaded to stay fairly liquid ahead of the auction on January 8. The centre has announced the re-issue of the 11.83 per cent 2014 for a notified amount of Rs 5,000 crore through a price-based auction on Saturday. Dealers said that the cut-off price at the auction will determine movement of bond prices next week. Dealers expect a cut-off range of Rs 101.90-102. The security ended at Rs 102.22. On Wednesday evening, when the auction was announced the bond was traded at Rs 102.80.Prices of long-dated bonds fell marginally by five paise at the closing hours over morning levels.
The 12.32 per cent 2011 ended at Rs 105.70 in evening trade as against its morning levels of Rs 105.75. Call money rates ended at 7.95-8 per cent as borrowers continued to access refinance to cover positions.
FORECAST: Bond prices seen lower on Saturday.

-- (Compiled by Anurag Joshi)