CALL MONEY
Call rates held rocksteady on Friday at 7 per cent levels. Opening the day at 7-7.1% from its last close at 6.95-7.1%, call rates held its opening range throughout the day. "Demand for funds was seen above the RBI's refinance level of 7% from banks to cover outflows towards a twin-bond auction slated for Monday", a dealer with a European bank said. The RBI on Thursday announced the auction of the 11.10% 2003 and 11.68% 2006 for anamount of 2,500 crore each on Monday. At close, call rates were seen at 7-7.05%. Call rates were above 7% levels on Thursday too, but largely as a result of a bank staff strike."The cushion of RBI refinance took care of most of the demand today", a dealers with a private bank said. RBI data showed refinance outstanding at the bank rate was Rs 8,579 ccrore on May 11, unchanged from May 10. On May 9, the amount outstanding was Rs 8,926 crore.
FORECAST: Call rates seen at around 7% levels on Saturday.SPOT DOLLAR
The rupee held firm against the dollar on Friday. Opening at 43.87/89 from overnight close at 43.87/88, the rupee went briefly to an intra-day low of 43.85 in dull trades. "Quite a few foreign banks were seen bidding for dollar..and the demand was matched by PSU banks.The SBI too was seen selling dollars. Trades were sqaurish", a dealer with a brokerage said. On Wednesday, the rupee had closed at 44.04/06 .The rupee's unexpected 0.85 percent fall to all-time lows 44.08. "What is not clear is that SBI bought and sold dollars on that day. It appears now that the RBI wanted a soft-landing of the rupee... today, the market was purely inter-bank driven, but unlike the past two days, trade was not dependent on the SBI's moves", an analyst said. At close, the rupee was seen at 43.91/91. Cash/spot quoted at 0.25/0.75 paise with cash/tom and tom/spot at 0.25/0.50 paise. The RBI fixed itsrate for the dollar at 43.92 against 43.94 on Thursday.
FORECAST: Rupee seen at 43.85 levels on Monday.
FORWARD PREMIUMS
Premiums held steady on Friday. The six-month forward premium ended at 2.44 % compared with Thurday 2.47%. "The volatility has subsided and the intention (soft-landing of the rupee). served. sImporters have been warned they cannot take the rupee's stability for granted and must follow risk management practices," the chief dealer of a private bank said. Corporate dollar demand was low and most were not interested in covering far forward exposures though Wednesday's move caught them by surprise. "Forward premiums were bid in the near term amid light import hedging of dollar exposures and liquidity concerns", dealers said. The one-month premium was quoted at an annualised 2.35% compared with Thursday's 2.18%. May dollars ended at 3/4 paise, June at 12/13 paise, while in the far end January closed at 83/85 paise and February at 93/94 paise.
FORECAST: Premiums seen holding flat on Monday.
GILTS
Short and medium-term bonds traded steady on Friday. The government on Thursday announced the auction of the the 11.10% 2003 and 11.68% 2006 for a notified amount of Rs 2,500 crore each on Monday. "Prices of medium and short-dated bonds were flat on the auction news. Those who were buying these bonds on Thursday after the rupee started to recover sold to make way for the new bonds," a primary dealer said, adding: "There was some buying after the rupee recovered as fears that short term liquidity might be tightened to curb the volatility in the rupee reduced". The 11.75 % 2001 was quoted at Rs 102.90/92, unchanged from Thursday evening's levels. The 9.90% 2005 was traded at Rs 100.32 compared to Rs 100.35 on Thursday evening. The 11.99% 2009 rose to Rs 109.25 before falling to Rs 109.10. The bond was dealt at Rs 108.98 on Thursday evening.
FORECAST: Bond prices seen range-bound on Saturday.
-- Compiled by Raghu Mohan
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.