In the first fact sheet in this series on the South African Reserve Bank (the Bank) titled “Introduction to the South African Reserve Bank”, was pointed out that the Bank’s mission is to protect the value of the rand, that is to combat inflation. This task has been assigned to the Bank in terms of the Constitution and the South African Reserve Bank Act 1989 (Act No. 89 of 1989). What does this imply and what is inflation? Why is inflation bad?