Magnetic diagnostics in fusion experiments can be strongly affected by eddy currents induced in the vacuum vessel and in-vessel conducting components. In the present work the effect of the eddy currents on magnetic measurements in the TCABR tokamak with nearly circular plasma shape and rectangular cross section of the vacuum vessel is discussed. A method to find the magnetic field generated by eddy currents, in reply to the magnetic field of plasma currents, is based on expansion of vacuum field in series of toroidal harmonics. The conclusion is that, if the sensors are placed near the vessel, the effect of the vessel is strong and it decreases substantially in the case of sensors located near the plasma boundary at the circular surface. © 2004 American Institute of Physics.