Subject: Old Mutual Implied Rates and Hard Boiled Egg Index - Monday September 22
Many thanks for not reacting against the Hard Boiled Egg Index. I am hoping that sanity might returned to the foreign exchange market soon and such ideas can be abandoned, but you will see from the table below that the Inter-Bank rate has been becoming a shrinking fraction of the more market-driven exchange rates.
I am working with updates of the figures below, which uses the OMIR to arrive ata cash value of about Zim $800 or an RTGS rate of Zim $45 000 to US $1
Currency OM implied rate Market rate*
US$ $39 945 2%-113%
£ $73 171 2%-113%
R $4 762 1%-3%
*Market rate range shown as a percentage of the OMIR
Hard Boiled Egg Index
Cost per egg Total for 7 eggs* ‘Fair value rate’ †
$200 $1 400 $1 400
*As per African median of 7 eggs per US$1 †Mid rate on HBEI
The Hard Boiled Egg Index is believed to demonstrate "fair value" when pricing goods at the cash rate and generally reflects continent wide purchasing power parity.
It is hoped that a website dedicated to the HBEI should be launched within the next month. Meanwhile, I will carry on updating the following table in the hopes that it will be helpful.