With regard to household consumption, perhaps the most significant effect of recent developments in mortgage finance is that home equity, which was once a highly illiquid asset, has become instead quite liquid, the result of the development of home equity lines of credit and the relatively low cost of cash-out refinancing.
The second half of 2001, especially the fourth quarter saw a steep depreciation of the Rand, not only against the $ but on a broad base. The situation got to a point where the two-way risk inherent in trading the currency was temporarily dislodged, and a perception existed in the market that the Rand was a one-way downward bet.