Frequently Asked Questions: Old Mutual Implied Rate (OMIR)
1.What is Old Mutual Implied Rate
It is a proxy or a figure that is used to compute the implied exchange rate for that day based on Old Mutual share value between 3 countries Zimbabwe, South Africa and England where they usually trade at the same market share price on all the stock exchanges.
2. How is the exchange rate computed and determined?
Old Mutual shares trade at the same value on the 3 different stock markets. This means the differences in the currencies is the implied rate between the currencies.
The exchanged rate is derived from comparing the share price of 1 Old Mutual Share In Zimbabwe against 1 Old Mutual Share in South Africa. Old Mutual is listed on both The Johannesburg and Zimbabwe Stock Exchanges. The difference between the value of these shares is the implied exchange rate between the ZAR and the RTGS.
The same goes for the London Stock Exchange. The price of 1 Old Mutual share price at ZSE and the price of 1 Old Mutual share at the LSE’s difference (after the dollar-pound difference has been factored in) is the implied exchange rate for the US and the RTGS.
3. Why must we trust the OMIR
Because it’s one of the most accurate ways to compute the exchange rate. The rate is usually used by the informal market to determine the exchange rate on the black market or the informal market as of that day.
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