Call money
Call money rates ended lower as demand for funds remained low on reporting Friday. The call rates opened at 7.75-8 per cent as compared to 8.25-8.50 per cent on Thursday. Dealers said most players had covered their positions so the borrowing demand was dull. The call rates ended at 6.75-7.25 per cent. "Inflows are enhanced since the RBI came out with a list of seven 364-day treasury bills for purchase on Tuesday. The response to the purchase of the T-bills has been good, with Rs 750-850 crore being injected into the system since," a primary dealer said. "The rates touched an intra-day low of 5.5 per cent, with stray deals reported also at 5-5.25 per cent," a private bank dealer said. Dealers expect the call rates to firm up to the familiar 8 per cent levels as some demand is expected on the start of the new reporting period.
FORECAST: Call rates seen higher around 8 per cent on Saturday.Spot dollar
The rupee ended steady on Friday, after touching an intra-day low of 43.60 on active dollar buying by some large corporates and state run banks. The rupee opened at 43.5775/5825 as compared to Thursday's close of 43.575/585. "A large state-run bank and exporters sold dollars when the rupee touched 43.60. This took care of the sudden dollar demand earlier in the day," a dealer at a state-run bank said. The rupee had weakened in noon trade amid renewed dollar buying by the SBI and foreign banks for their corporate clients. Dealers said a few other state run banks might have also made light purchases on behalf of an oil company. The rupee closed at 43.5775/5850.
"The state-run banks may be buying dollars on behalf of the RBI," a private bank dealer said. Cash/spot ended at 1.25/1.5 paise, cash/tom at 1/1.25 paise and tom/spot at 0.25/0.50 paise. The RBI fixed its reference rate for the US dollar at 43.59 as compared to 43.58 on Thursday.
FORECAST: The rupee seen steady on Monday.
Forward premiums
Forward premiums moved up to end higher on Friday. Dealers said paying was more reflective in the near forwards, though premiums rose across the board on paying by banks. The six-month forward annualised premium ended at 3.20 per cent compared to opening levels of 3.16%. The six month premium ended Thursday at 3.30 per cent. "The call rates were tracking the sudden firmness in the spot rupee rather than the usual call money rates," a dealer with a forex brokerage said.
Call rates ended lower at 6.75-7.25 per cent on reporting day. In the near forwards, March dollars ended at 9/10 paise, April at 23/24 paise, while in the far end September closed at 76/77 paise and October at 87/89 paise. "Public sector banks were paying premia for three and six month maturities," a dealer with a state-run bank said. Dealers said forward premiums may dip on Monday in case there is any signal on interest rates from the RBI.
FORECAST: Premiums seen range-bound on Monday.
Gilts
Bond prices ended marginally higher on Friday as there was sporadic buying in some securities. The 11.83% 2014 bond ended at Rs 107.10 as compared to the previous close of Rs 107. The security moved up to Rs 107.25 from morning levels of Rs 107.05/1. There was little impact of the RBI governor's comments on interest rates published on a magazine website. The website quoted Jalan as saying: "The government has certainly made some positive moves and we hope over a period of time all these changes will have a favourable impact in the interest rate environment." Jalan was also quoted as saying there were structural factors that are constraints to banks lowering rates.
Dealers said the views, expressed by the governor earlier this week, were a reiteration of the RBI's statements. Markets have been hoping for arate cut sinceJanuary when the government cut rates on public savings schemes.
FORECAST: Bond prices seen range-bound on Friday.
-- (Compiled by Anurag Joshi)
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.