A recent view expressed by the Minister of Finance that South Africa should consider the possibility of introducing inflation targeting, fuelled renewed speculation on the possibility of such a move in the near future. The ignorance revealed about inflation targeting in the subsequent public debate exposed once again the need for a better understanding of the intricate process of inflation in a modern economy.
I will derive challenges from these trends that I think are particularly relevant for transfer systems. Finally, I will point out where I see the necessary and adequate responses of the private and public sector to these challenges, in particular the Eurosystem’s contribution to an efficient and safe infrastructure. 2. Different perspectives of liquidity  Let me begin with a short reflection on liquidity.