A technical negligence may have led to the dollar figures for foreign investments in India being overstated by about 25 per cent, as the Securities and Exchange Board of India (Sebi) has been using a static rupee conversion rate for the past one-and-a-half years.
Sebi provides information about FII investments in equity and debt markets on a daily basis, which is widely consulted by market participants.
The Sebi website provides daily investment figures for the previous trading day in rupee as well as dollar terms at “month exchange rate.”
However, this exchange rate has remained unchanged at Rs 40.34 a dollar since October 10, 2007, although there has been a wide variance in the rupee-dollar exchange rate since then. In the last few months, the dollar has been hovering near the Rs 50-level.
The static exchange rate, which could be due to a technical negligence, has led to dissemination of false FII investment figures in the US currency for about one-and-a-half years.
Officials at Sebi could not be immediately contacted for their comments and an email query remained unanswered.
Kejriwal Research and Investment Services’ Arun Kejriwal said, “As far as the rupee value is concerned, there is no confusion as it remains unchanged. But when we look at the dollar value and it is overstated by around 25 per cent, it creates a wrong impression in investors’ minds.”
