The investment of scheduled commercial banks in non-SLR instruments has shown a distinct improvement from a comparatively negligible level last year. Money supply (M3) has been tracking real output developments and inflation conditions with a continuing preference for safety reflected in the appetite for bank deposits.
Although various segments of the Indian financial markets have remained relatively unaffected by international financial developments, equity markets have moved down along with global equity markets. On the other hand, the strength of capital flows has resulted in a modest appreciation of the exchange rate of the rupee vis-a-vis the US dollar.