Money

Sentiment : Cautious

Call money rates were in a range of 5.65-5.80 per cent amid comfortable liquidity.

The Reserve Bank of India (RBI) received just three bids worth Rs 2,970 crore at the repo auction, which were fully accepted.

Banks did not want to disturb their cash reserve ratio positions on reporting Friday and hence did not flock to the repo auction.

Gilts prices fell in the morning after RBI governor Bimal Jalan indicated that there may not be any reduction in bank rate even if the Federal Open Market Committee of United States effects a cut in its discount rate.

The sentiment, however, improved in the afternoon as the cut-off yield in the open market operation auction was set below expectations.

Participants felt that the RBI was satisfied with the dip in yields and was using the opportunity to offload its stock.

Outlook: Call money rates are likely to remain in a band of 5.75 per cent to 5.75 per cent. Gilts are likely to go up by 25-30 paise, but there may be profit booking at higher levels.

Forex

Sentiment : Positive

The rupee rose to close at 48.64/6450 per dollar due to huge inflows of dollars from exporters.

Public sector banks seem to have kept off, as did the Reserve Bank of India (RBI).

The rupee touched 48.6950 in the morning on expectations of a huge corporate payout. But this did not materialise.

Premiums increased after the RBI governor said bank rate cut may not follow a rate cut by the US Federal Reserve.

Outlook: The rupee is likely to open high on Monday but may come down on dollar buying by state-owned banks, and close around the 48.65/$ mark. Forward dollar premiums will track gilt yields.