TheRBI received no bids at its reverse repo auction. "The call rates ruled below the floor for reverse repo funding at 9%. This discouraged players from going in for funding above this rate," a dealer said. However, the RBI accepted the single bids of Rs 1,500 crore it received for the repo sale. The RBI mops up liquidity at the bank rate of 7% through its repo sale. "The RBI has not received any bids at the auction for a long time as the call rates ruled above the bank rate," a dealer said. Dealers said liquidity was adequate, with the centre's bond sale on Tuesday having no impact on the rates. The Centre announced 5-year stock auction for Rs 3,000 cr on July 11.
FORECAST: Call rates seen steady on Tuesday.

Spot dollar
The rupee on Monday ended firmer by around three paise amid dollar inflows from PSU banks and exporters. The rupee opened slightly lower at 44.70/71 against the previous close of 44.695/705. "The SBI started offering dollar at lower quotes, which provided some comfort level to the market," a PSU bank dealer said, adding: "Exporters joined in which allowed the currency to firm." The rupee rose to an intra-day high of 44.6625. "There was also selling by some foreign banks, which act as custodians for FIIs," a dealer with a forex brokerage said. The rupee ended at 44.665/675. "The market's behaviour is largely influenced by the posture of SBI," a dealer said.

Meanwhile, the RBI maintained its reference rate for dollar at 44.69 as against Friday's 44.73. Cash/spot and cash/tom ended at 0.00-0.125 paise, with tom/spot ending at 0.00/0.25 paise.
FORECAST: The rupee seen in a tight range on Tuesday.

Forward premiums
Premiums rose marginally on some paying pressure from banks on Monday. The sixth-month premium ended lower at 3.45 per cent from 3.40 per cent on Friday. The one-year premium was steady at 3.40 per cent. July dollars ended at 6/7 paise, August at 19/21 paise, while in the far end, January closed at 84/86 paise and February at 96/98 paise. "Premiums did not track a stronger rupee. Rather, there were concerns on the liquidity front as the RBI has announced a Rs 3,000 crore auction for Tuesday. Near forwards rose by 1-2 paise while far forwards firmed by 3-4 paise. "There was paying notably in the one, three and six month maturities," a dealer said. "Players booked for the months ahead in anticipation of a weaker rupee," he added. In the money market, call rates ruled easy and ended at 6.95-7.05 per cent, unchanged from the previous day's close.
FORECAST: Premiums seen range-bound on Tuesday.

Gilts
Bond prices rose amid buying interest by players on Monday. "There were concerns about liquidity amid an upcoming auction on July 11. But this could not deter players from buying," a dealer said. Short and medium-term bonds rose by 5-10 paise in the morning session, but shed some ground during the afternoon. The 11.9% 2007 bond rose to Rs 106.37 from Thursday's close of Rs 106.32. The bond ended at Rs 106.36. The 11.68% 2006 bond ended at Rs 105.46 as against the previous close of Rs 105.39. "The sentiment has by and large been positive as call rates have ruled steady. The rupee also firmed," a dealer said. "The RBI announcement for auctioning 5-yr paper for Rs 3,000 crore was factored in by the market," a dealer said. The Centre has a borrowing plan of Rs 1.17 lakh crore for the current fiscal.
FORECAST: Bond prices seen holding current levels on Tuesday.

-- (Compiled by Anurag Joshi)