FIIs told to reverse short positions on borrowed scrips: FM

Finance Minister P Chidambaram stated that Sebi has asked FIIs to reverse short positions on borrowed shares. "Short transactions are likely to be reversed over the next few days." He disclosed this while addressing mediapersons today.



Reacting to the statement, Sandeep Parekh, Visiting Associate Faculty at IIM-A said the reversal of short positions is wrong as it removes cushion from the market.



Chidambaram added there is adequate liquidity and that banks must lend and not park in reverse repo.



According to Chidambaram, the inflation rate is still high. "Inflation is falling on easing crude prices. We see it easing further."



The Finance Minister also stated that reports of ICICI Bank increasing home loans rates is not correct.



Meanwhile, yesterday there were reports from CNBC-TV18, quoting sources, that the Sebi had re-affirmed its disapproval to overseas lending and borrowing by FIIs (foreign institutional investors). The Sebi has asked FIIs not to take fresh overseas lending and borrowing positions.



The Sebi had met top P-Note issuing FIIs earlier yesterday. Some P-Note issuers have already stopped overseas lending and borrowing.

Published on Thu, Oct 23, 2008 at 13:58 , Updated at Thu, Oct 23, 2008 at 15:40
Source : CNBC-TV18