Sentiment : Positive
The surfeit of cash in the banking system kept call rates ranged at 6.60-6.80 per cent. There were 19 bids worth Rs 21,795 crore at the repo auction, which were accepted partially for Rs 17,436 crore.
Gilt prices rose 35-45 paise driven by liquidity. Expectations of a low cut-off at the auction helped prices rally. Private banks were the most active in gilts followed by foreign banks. Corporate bond yields dipped in tandem with gilts.
Outlook: Call rates are expected to remain comfortable owing to the abundance of liquidity. Gilt prices, on the other hand, may move up marginally.
Forex
Sentiment : Dull
The rupee stayed in a narrow range of 48.64-48.67 per dollar amid little activity. Dollar inflows, though low, were mainly from exporters.
There was slight demand for the greenback from diamond importers. Public sector banks (PSBs) were buying dollars at 48.65, while foreign and private sector banks were the sellers.
PSBs were seen buying dollars on behalf of the Reserve Bank of India. Forward premiums dipped by 10-12 basis points following the slide in government paper yields.
Outlook: The rupee is likely to open a bit higher and will close in the range of 48.65-48.68 against the greenback on dollar buying by state-owned banks. Premiums may dip due to the easy liquidity condition in the banking system.
