In the first fact sheet in this series on the South African Reserve Bank it was pointed out that the Bank' s mission is to protect the value of the rand, i.e. to combat inflation. This task has been assigned to the Reserve Bank in terms of the Constitution as well as the Reserve Bank Act.
Inflation is a process of continuous increase in the prices of most goods and services in a country.
This does not necessarily mean that all prices increase. There may be some exceptions, such as computer prices which have actually declined in recent years. Inflation can therefore be described as a persistent general increase in prices. In the twelve months up to January 1997, the cost of that basket rose by 9,4 per cent. This increase of 9,4 per cent in the so-called consumer price index is referred to as the inflation rate.