The rest is money created by banking institutions over which the Reserve Bank has but an indirect control. Money serves the purpose of a means of payment. It is also a unit of account in terms of which the value of goods and services are measured. It serves thirdly as a store of value for the savings of the community.
These three functions of money make it essential that the value of money shall remain as stable as possible. No modern market-oriented economy can function well if the value of its currency is not kept stable. Inflation is a continuous decline in the value of money. This will be reflected in a continuous rise in the prices of goods and services.