Call money
Call rates were not quoted on Friday as the clearing operations of the central bank was closed on account of half-yearly account closing. The Centre on Friday cut the rate of interest on its EPF by one percentage point to 11% from 12%, effective April 1, 2000. Dealers expect the call rates to open at 9-10%cent on Saturday at the start of a new reporting Friday. "The EPF rate cut has fuelled buying interest in the securities market. The call rates are unlikely to cross 10% on Saturday," a treasurer with a private bank said. The overnight interest rates had ended at 6.90-7.10 % on Thursday. According to RBI figures, total borrowings in the call/notice money market by players totalled Rs 16,003 crore, while aggregate lending was Rs 12,510 crore. "There were large number of two-day deals in the previous session at 7-7.5 per cent due to lack of trading on Friday," a primary dealer said.
FORECAST: Call rates seen around 9-10 per cent on Saturday.Spot dollar
The rupee ruled in a thin range in dull trading on Friday. The rupee opened at 44.67/68, little changed from the previous close of 44.6675/6775. "Trading was range-bound with nominal demand from corporates and importers," a dealer with a forex brokerage said. The rupee was traded at 44.665/675 for most part of the session. "Dollar supply was good, particularly inward remittances from the Gulf," a state-run bank dealer said. The rupee ended unchanged at 44.665/675. Tom/spot ended at 2/2.5 paise. Cash/spot and cash/tom were not quoted as clearing operations of RBI were shut. The RBI fixed its reference rate for the dollar at 44.68 from the previous day's 44.67. "Month-end dollar demand was easily absorbed by supply of dollars," dealers said. The dollar sales from mainly from state-run banks including the State Bank of India and a few foreign banks.
FORECAST: The rupee seen steady on Monday.
Forward premiums
The forward segment on Friday rose on paying pressure from banks.
"There was paying by banks as supply of funds dried up as there was no trading in the call money market. Most deals on Thursday were transacted at higher levels for two day settlement," a dealer with a forex brokeragesaid. The six-month premium ended at an annualised 3.40 per cent as compared to 3.30 per cent on Thursday. The one year premium ended steady at 3.24 per cent. July dollars ended at 12/13 paise, August at 24/25 paise, while in the far end January closed at 81/83 paise and February at 93/94paise. "Activity was more pronounced in the one, three and six month maturities," a state-run bank dealer said. The call money market was closed as there was no clearing operations.
FORECAST: Premiums seen range-bound on Monday.
Gilts
Bond prices on Friday rose in evening deals amid cut in the employee provident fund (EPF) rate by the government. The 11.90 per cent 2007 security ended at Rs 106.03, off intra-day highs of Rs 106.09.The bond was quoted at Rs 105.87 in Thursday evening deals. "Trades were dull in mid morning trades, but rose after news of the EPF rate cut came in. The 11.75 per cent 2001 bond ended at Rs 102.30 as compared to Rs 102.37 in morning deals. "There was good activity in the short and medium end, with trading in the far end being lacklustre," a state-run bank dealer said. Dealers said they expected a bond auction to be announced by the Centre next week. The Centre has targeted a gross borrowing programme of Rs 1,17,000 crore for the current fiscal.
FORECAST: Bond prices seen marginally higher on Saturday.
-- (Compiled by Anurag Joshi)
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.