Call money
Call rates ended lower despite the huge outflow of Rs 7,500 crore through the Reserve Bank of India's (RBI) repos-auction. Opening the day at 7.10-25%, from Monday's close of 7.15-25%, call rates remained steady owing to ample liquidity to meet the demand of borrowing banks. The release of Rs 2,100 crore of incremental funds after the second tranche of the CRR cut came into effect boosted the liquidity position of the market. The outflow made no impact on the rates as the rates closed around at 7.10-20%, a shade low from their overnight close. However, there may be pressure on the rates in the later half of the week due to advance tax outflows, a dealer noted. The RBI today sucked out Rs 7,500 crore through its one-day repos-auction at 7% rate. Elsewhere, the National Stock Exchange (NSE) pegged its overnight Mibid and Mibor at 7.10% and 7.23% respectively.FORECAST: Call rates seen around 7.25-7.50% levels on Wednesday.
Spot dollar
The rupee were under pressure against the dollar on renewed demand from corporates and importers on Tuesday. Opening at 46.57/58, lower from Monday's closing level of 46.55/56, the rupee slumped at early trades on fresh wave of short coverings by banks. Concerns over the uncertainties at the stock market helped the steady decline of the rupee. The BSE's sensitive index tumbled down by 210 points on a fresh wave of selling. "Worries of worsening foreign institutional investment (FII) led huge dollar outflows", a dealer said. At close, the rupee was seen at 46.65/66, down by ten paise from its overnight levels. Meanwhile, the RBI fixed its reference rate for dollar at 46.61, against its previous fix of 46.55. In cross-currency trades, the euro was quoted at 43.24/26, with the pound-sterling at 68.22/25 and the yen (100) at 38.76/78.
FORECAST: The rupee seen depreciating on Wednesday.
Forward premiums
Forward premiums moved up on Tuesday. The six-month and one-year annualised premia ended higher at 4.42% and 4.60% as against their overnight levels of 4.25% and 4.50% respectively. The premiums went up sharply as the rupee weakened by ten paise from its Monday's levels. The rupee closed at 46.65/66 today amidst concerns over the uncertainties for the stock prices. The BSE's sensitive index tumbled down by 210 points at close on a fresh wave of selling.. "The advanced tax outflows at the later half of the week would help the premiums to be steady for the week", a dealer with a forex dealership said. The short-end premiums ended 0.5 paise lower while the premiums in far forwards moved up by two/three paise against their previous closes. March dollar traded at 7.5/8 paise, while in the far forwards, August traded at 95/96 with September at 111/112.
FORECAST: Forward premiums seen rangebound on Wednesday.
Gilts
Bond prices eased marginally on Tuesday. The 11.40% 2008 paper traded at Rs 108.80, with 11.03% 2012 at Rs 105.60 and 11.30% 2010 at Rs 108.40. "The secondary market for securities remained subdued and prices of government bonds drifted lower on modest profit-booking. Prices fell by 10-20 paise across all maturities. Call rates held rangebound and closed at 7.10-20%. There was comfortable liquidity in the system inspite of the huge outflows of funds as the RBI sucked out Rs 7,500 crore through its repos-auction at 7% rate. The RBI, however, did not receivable any applications for its reverse-repo auction. On the NSE's wholesale debt segment, trades worth Rs 2,255 crore were seen. Trades worth Rs 480 crore were seen at 11.40% 2008 paper, while those in the 11.03% 2012 and 11.30% 2010 traded at Rs 290 crore and Rs 280 crore respectively.
FORECAST: Bond prices seen moving down on Wednesday.
(Compiled by Atmadip Ray)
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
