Call money
Call rates went to an intra-day high of 13.50% on Tuesday. Opening the day at 13-13.50%, it ruled higher with the RBI hiking the cut-off its three-day repos to 15%. "In all the RBI sucked out Rs 5,970 crore through its one-day repos at 14% and three-day repos today", a dealer said, adding: "Short-term rates could move up further if the rupee does not stabilise". The one-day repos rate has risen to 14% from 8.25% from last Thursday when it was introduced to mop liquidity to protect the rupee. The RBI hiked the CRR to 8.5% in two stages from 8%; cut refinance limits of banks and also hiked the benchmark bank rate to 8% from 7% on July 21. The rupee continued to fall and hit a new low of 45.74/76. On Monday, the rupee had gone to 45.5750/59 on good corporate and inter-bank demand for dollars on Monday. Call rates hovered in a tight range of 12-13.50% ahead of reporting Friday with some players covering their positions, it closed at 13-13.25%.
FORECAST: Call rates seen inching up on Wednesday.Spot dollar
The rupee continued its southward sojourn,hit a new low of 45.74/76 on Tuesday. Opening the day at 45.57/59 from its last close at 45.55/56, went lower on good corporate and inter-bank demand for dollars. `` Banks made heavy dollar purchases in the market, which resulted into further fall in rupee's value" a dealer said, adding: ''And expecting, stability in the rupee-dollar movement, these banks have postponed their commitments, but now considering the seriousness, they might have covered their genuine dollar demand". The rupee has so far lost 84 paise in eight straight trading sessions from 44.85/86 on July 27. The RBI did not intervene to support the rupee value when the market expected it to do so at 45.75 levels. At close, the rupee was seen at 45.73/74. Cash/tom quoted unchanged at 0.75/1 paise, cash/spot at 0.75/1 paise (1/1.50 paise) with tom/spot at 1/1.25 paise (0.50/0.75 paise). The RBI pegged rate for the dollar 45.72 as against its previous 45.57.
FORECAST: Rupee seen at 45.75 levels on Wednesday.
Forward premiums
Forward premiums came off by close of trades on Tuesday. The six-month annualised forward premium ended at an annualised 5.21% (4.59%). August dollars ended at 19/20 paise (20/22 paise), September at 27/39 paise (40/42 paise) with February at 121/122 paise (126/128 paise) and March at 134/136 paise (140/143 paise). "Premiums opened higher, but came off by close of trades... the six-month annualised forward cover closed at 4.90%. There was receiving interest across all maturities... more so in the near terms", a dealer with a forex brokerage said. The Reserve Bank's had on Thursday said that it would take further measures as may be necessary from time to time in order to stabilise the market. On Wednesday, the central bank introduced the four-day and seven-day repos in addition to the one-day repo to suck excess liquidity in the banking system to arrest the fall in rupee. "Receiving interest is coming through", a dealer said.
FORECAST: Premiums seen softening on Wednesday.
Gilts
Bond prices gained by close of trades on Wednesday. The 12.50 per cent 2004 was seen at 104.24 levels (Rs 100.34); 11.00 per cent 2006 at Rs 99.22 (Rs 99.40) with the 12.50 per cent 2004 at Rs 104.24 (Rs 104.34). In all the Reserve Bank suckedout Rs 5,970 crore through its one-day repos at 14% and three-day repos at 15per cent today", a dealer with a primary dealership said. "The repos results had no effect on the bond market... neither di the weakness in the rupee, which went to an intra-day low of 45.75 to the dollar", an analyst with a primary dealership said.The 11.50 per cent 2004 dip to Rs 101.32 (Rs 101.38) according to the dealar. The Reserve Bank did a private placement of the 11.43 per cent 2015 amounting to Rs 6,000 crore.
FORECAST: Bond prices seen holding flat on Wednesday.
-- (Compiled by Raghu Mohan)
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.