Sentiment : cautious
Surplus cash in the system keeps call rates in 5.65-5.80 per cent range.
The repo auction saw just six bids worth Rs 4,075 crore today, which were accepted partially for Rs 2,038 crore.
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Banks bid for lower amounts at the repo auction as they were building up position ahead of reporting Friday.
Gilt prices opened higher, but slipped on the back of profit-booking.
The announcement of the Rs 4,000 crore open market operation (OMO) auction affected gilts. Players say it shows the Reserve Bank of India's discomfort with falling yields.
Outlook: Call rates are likely to remain around 5.55-5.75 per cent levels owing to continuing good liquidity. Gilt prices may slip on concerns about Friday's Rs 4,000 crore OMO auction.
Forex
Sentiment : Positive
The rupee remained in a thin band of 48.6550 to 48.6650 per dollar amid subdued activity.
Tapered dollar inflows through exporters restricted the session.
The inflows were mainly countered by dollar buying by state-owned banks, a move seen as indirect intervention by the Reserve Bank of India (RBI).
Premiums increased a bit in tandem with the rise in government paper yields.
The expectations of a rate cut by the US Federal Reserve also helped lift premiums.
Outlook: The rupee is likely to remain in a tight range of 48.64 to 48.67 per dollar on the back of RBI intervention through state-owned banks. Premiums may increase a bit due to concerns about the OMO auction to be conducted on Friday.