Second, inflation was too low even beforehand, and inflation expectations are moving further and further away from 2%, which we aim in our monetary policy to achieve over the medium term.
Over the first ten months of 1996, the effective depreciation of the rand in nominal terms exceeded 22 per cent. In real terms, this represented a depreciation of about 15 per cent. An ex post analysis of the composition of the capital in- and outflows of last year provides interesting information for a better understanding of the changes that took place.