I understand that inflation occurs when prices are raised, such as electricity, fuel, food, wages, bank charges, etc.I will post the SARB response. If anyone would like to explain this anomaly in non-jargon terms, please feel free to leave a comment.
I don't understand why inflation is supposed to be reduced by raising the bank rates, in particular home loans. If the cost of my home loan goes up, how is this different from the cost of fuel or electricity going up?
Update: "Patrick" from the reserve bank sent me some "Fact Sheet" PDF files, that you can find at the reserve bank's web site by going to the "About Us" section and clicking on "Fact Sheets". I guess if they need to explain it in 8 fact sheets then the simple answer is that there is no simple answer and we must just shut up and pay. Thanks for nothing.