In a statement issued last Friday, the Reserve Bank indicated that the rate of increase in the M3 money supply should not exceed 10 per cent in 1997. This will provide for real growth in the economy at a rate of between 2 and 3 per cent, and inflation at a level well below 10 per cent.
The Reserve Bank is concerned about the rising trend in inflation that gained substantial momentum during the course of 1996. The average rate of inflation for last year was 7.4 per cent, being the lowest rate of inflation South Africa had since 1972.