When you pay your electricity bill by direct debit, the funds are effectively transferred from your bank account, across the exchange settlement account of your bank to that of your electricity company’s bank and into the electricity company’s account. These exchange settlement accounts at the Reserve Bank must always have positive balances.
In order to ensure the maintenance of price stability precisely over the medium term, it is, however, crucial that longer-term inflation expectations of economic agents do not increase. In this respect, the past decisions to increase ECB rates should have contributed to maintaining confidence in price stability over the medium term.