The principal instruments of monetary policy conducted by the Federal Reserve – open market operations, the discount rate, and reserve requirements – do not operate in a vacuum. 3 Rather, they operate dynamically in association with ever-changing financial market conditions to produce effects on the real economy. Indeed, well-functioning financial markets are a precondition for a sustainable, prosperous economy.
Similarly, the aggregate ceiling for overseas investment by mutual funds, registered with SEBI, was enhanced from $ 4 billion to $ 5 billion in September 2007. This was further raised to $ 7 billion in April 2008.