Fact File: INTEREST RATES AND INFLATION

Interest rates and inflation tend to go hand-in-hand, because raising interest rates is one way in which central banks can control inflation.

The SA Reserve Bank has successfully controlled inflation in South Africa in this way for the last two decades or more, with the aim of keeping it within a range from a minimum of 3% to a maximum of 6%. As can be seen in the lower graph, inflation has only occasionally breached that range.