Call Money & Gilts

Trend : Stable

Call money ended steady at 5.65-5.75 per cent amid an abundance of cash in the banking system.

The open market operation (OMO) sale of the 8.07 per cent 2017 paper by the RBI and the repo auction did not have much impact on liquidity.

The RBI received 13 repo bids for an amount of Rs 18,110 crore. It accepted bids worth Rs 16,299 crore at a cut-off rate of 5.75 per cent.

The RBI has stopped selling the 8.07 per cent 2017 bond after reportedly sucking out over Rs 1,000 crore of funds over the last two days through the paper.

Gilts rallied by around 10 paise in the morning after close of sale of the 8.07 paper. They fell later on fears about further OMO sales and profit booking.

The benchmark 7.40 per cent 2012 paper moved in a narrow five-paise range (Rs 100.45-100.50). The security of the day, the 8.07 paper, fell to Rs 103.07 from the day's high of Rs 103.15.

Volumes in the gilts mart was pegged at Rs 4,400 crore as against Rs 3,700 crore yesterday.

Outlook for tomorrow : Call money is expected to hover around 5.75 per cent. It could edge up on last-minute borrowings by banks to cover their reserve requirements for reporting Friday. In case there is no OMO sale, gilts could see a minor rally.

Forex

Trend : Positive

The rupee closed at a five-month high of 48.6750/6850 per dollar today as against Wednesday's close of 48.6850/6900. The previous closing high of the Indian unit was 48.45 on February 21.

Exporter sales, slack importer demand and a weak dollar helped the rupee appreciate.

Further appreciation was checked by public sector banks buying at 48.6800/6825 levels.

Sentiment not at all bearish; gradual appreciation of rupee expected.

Corporate activity was muted. Most of the dealing was between banks.

Forward premiums edged lower on the back of easy liquidity in the money market and the benign outlook on interest rates.

The six-month annualised forward premium declined to 4.45 per cent as against the previous close of 4.56 per cent.

Outlook for tomorrow: The rupee is expected to trade in the 48.65-48.68 range per dollar. PSU banks are seen buying at 48.65-48.67 levels. Forward premiums could edge lower.