call Money
call rates held more or less steady on Tuesday. Opening the day AT 8-8.05%, from its last close at 7.98-8%, call rates were extremely rangebound as it was the early half of a new reporting fortnight. "Liquidity is very good now that the entire amount of $5.5 billion raised by the SBI's IMD has come in," a dealer said. The RBI accepted one application for Rs 6,000 crore at 8% at its one-day repos-auction. On Monday, RBI had accepted two applications for Rs 6,100 crore at its one-day repos auction. "Bond prices also continued their bullish trend and firmed up further by 5 to 10 paise on renewed buying interest, buoyed by the strong rupee, which closed at 46.75/76," a dealer said. Inter-bank liquidity has remained easy despite the RBI's aggressive open market operations and primary auctions, which has almost neutralised the IMD inflow. Meanwhile, the NSE pegged its overnight Mibid and Mibor at 7.99% and 8.09% levels respectively.FORECAST: Call rates seen holding 7.90-8.10% levels on Wednesday.spot dollar
The rupee gained by close of trades against the dollar on Tuesday to 46.75/76. Opening the day at 46.80/81 from its last close at 46.8250/83, the rupee gained by 7 paise on good dollar inflows and poor demand for dollars. "Renewed export-dollar supply coupled with decline in world oil prices saw the rupee gain... the rise in the country's foreign exchange reserves also helped lift sentiment," a dealer said. The RBI's weekly statistical supplement released on Saturday said that the country's forex reserves increased by $1.2 billion to $38.29 billion. "The entire amount of $5.5 billion raised by the SBI's IMD mop-up has come in, and sentiment is different," a dealer said. Cash/spot and cash/tom finished at 0.40/0.45 paise and 0.20/0.25 paise respectively. "The rupee will hold current levels... the Reserve Bank of India has also suspended its two-day repos. Further, the euro has also gained," an analyst with a primary dealership said. FORECAST: Rupee to hold steady on Wednesday; seen gaining a shade.
Forward premiums
Forward premiums came down on Tuesday. The six-month annualised premium closed at 3.96% after opening at 4.06%. "The futures market was fairly active in contrast to the quiet spot-trades... forward dollar premiums declined sharply on heavy receiving interest. Exporters resorted to forward dollar sales given a stable spot-rupee. This saw premiums fall across the board," a dealer said. Renewed export-dollar supply coupled with decline in world oil prices saw the rupee gain. The rise in the country's forex reserves also helped lift sentiment. The RBI's weekly statistical supplement said that the country's forex reserves increased by $1.2 billion to $38.29 billion. December dollars traded at 6/7 paise, while in the far forwards, May dollars quoted at 88/89 paise with June at 103/104 paise. "The SBI's $5.5 billion IMD mop-up has also buoyed sentiment... firm call rates at 8-8.10% levels also saw premiums cool down", a dealer with a primary dealership said.FORECAST: Forward premiums will dip on Wednesday.
gilts
Bond prices were up a shade on Friday. The 11.40% 2008 paper was seen at Rs 101.69 and the 11.50% 2006 paper at Rs 103.05. "Bond prices were up on the back of a stronger spot-rupee at 46.75/76 levels and good liquidity in the call market where call rates close at 7.95-8% levels," a dealer said. Good liquidity saw the 10-year Karnataka state-loan auction for Rs 250 crore sail through. The Reserve Bank of India(RBI) accepted 33 bids for Rs 250 crore at a cut-off yield of Rs 11.57 per cent. "It is the beginning of a new reporting fortnight, and demand for funds was rather poor," an analyst. On the National Stock Exchange's wholesale debt segment, trades worth Rs 1,828 crore were seen. Trades worth Rs 405 crore were seen in the 11.40% 2008 paper while those in the 11.50% 2011 and 11.90% 2007 amounted to Rs 180 crore and 150 crore.
FORECAST: Bond prices to hold steady on Wednesday; slight up-tick seen. (Compiled by Raghu Mohan)
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