With the Phillips curve appearing to be a less reliable guidepost than it has been in the past, the anchoring role of inflation expectations remains critically important. On expected, similar to realized, inflation, recent developments suggest some reasons to be concerned more about undershooting than overshooting.
Stated briefly, the assets of the banking sector have increased substantially; from a nominal value of R281 billion on average, between 1990 and 1994 to an average of R2 100 billion on average between 2005 and 2007.