The call rates closed at 20 per cent with most of the deals being struck in the 20-25 per cent range. There were even stray deals struck at 30 per cent. Despite being a reporting Friday, tomorrow the call rates are likely to be in the range of 10 per cent, dealers said.

The overnight call money opened at 10.75-11 per cent, unchanged from its previous close. However, the rates started climbing up due to unusually high demand for funds under tight liquidity conditions. The RBI received Rs 20 crore on Thursday through its four-day fixed rate repo at 8 per cent.

The tight call rates triggered 8-10 paise fall in the prices of short-term gilts as banks rushed to offload government papers to generate liquidity and forward premiums firmed up across the board.

"Banks were offloading gilts and liquidating their portfolio in order to have sufficient funds to meet their CRR requirements on Friday," said a dealer from a private bank.

The forward premiums firmed up owing to paying pressure on the rupee in the forward market as a few corporates who had to pay in the Indian currency were not able to raise funds from the term-money market at high rates. The high call rates saw one-month annualised premium on a par with three-month annualised premiums to be quoted at 6.5 per cent.

Debt market dealers said most active security traders have already taken positions in the market in expectation of the inflow of Rs 3,000 crore which is likely to come into the system on January 18 through redemption of zero coupon 1999 paper.

"The fact that the surplus funds to the tune of Rs 2,500 crore which have gone out of the system through sale of securities under open market operations has contributed to the tight liquidity conditions in the system," money market dealers said.