Chances are if you have lived in Zimbabwe for some time you probably have heard of the so-called Old Mutual Implied Rate (OMIR). If not, fear not we can introduce you to it. Old Mutual is an international behemoth that is listed on several international stock exchanges including, for example, the Johannesburg Stock Exchange (JSE), Zimbabwe Stock Exchange (ZSE) and the London Stock Exchange (LSE).

It doesn’t end there, Old Mutual shares are fungible i.e. you can exchange one share in Zimbabwe for a share you bought on another exchange. Now in a country like Zimbabwe where people feel the exchange rate is heavily controlled sometimes to unreasonable extends (like insisting bond notes were 1:1 with USD) Old Mutual shares can present a way to estimate the true networth of a given currency such as the Zimbabwean dollar we do this by:

Looking at the price of Old Mutual Shares in London let us say the shares are selling for $10 US per share
Look at the price of Old Mutual Shares in Zimbabwe let us say the price is $50 ZWL
This means the implied exchange rate is 5 0/10 ie.
$5 ZWL:1 in our case
We call this the OMIR

A lot of people including renowned economist feel this a respectable way to estimate the exchange rate where none exist or where one that exists is considered unreliable. The OMIR is not new either, it gained prominence during the last economic crisis of 2008. Back then like now the government expressed outrage and disdain when dealing with the rate. They didn’t like it and over the years have come up with strategies to kill the OMIR including suspending Old Mutual share trade on the ZSE, eroding the fungibility of shares but it seems like a zombie the thing won’t go away.

This has made the authorities even more angry. In a recent communication they have called the OMIR rate “a phantom contrived rate.”

The fatal blow to the OMIR, kill the ZSE?

So the government has decided to do something they have not done before, suspend the entire Zimbabwe Stock Exchange:

Concurrently, the measures will also include the suspension of all trading on the Zimbabwe Stock Exchange.
[Mobile Money systems are] with the help of the Zimbabwe Stock Exchange, either deliberately or inadvertently, in illicit activities that are sabotaging the economy.
Secretary Mangwana’s statement

So is the OMIR dead? Well without the Zimbabwe Stock Exchange you cannot calculate the OMIR. It’s like stepping on a glass thermometer and breaking it. It means you can no longer take the temperature with it. It doesn’t mean you don’t have a fever though does it?