Beint á efnisyfirlit síðunnar

Revised currency baskets

The weights of currencies in the baskets used to calculate the broad and narrow merchandise- and trade-weighted indices have been updated. The weights are determined based on Iceland’s external trade in 2013. The last review was carried out in January 2014. The tables show the new baskets and the changes resulting from the review. The revised baskets will be used as of 1 January 2015 and will remain in use until the next annual review.

The weights are determined based on the composition of Iceland’s external trade during the previous year. The aim is that the baskets reflect as closely as possible the composition of Iceland’s external trade in goods and services. In 2011, Statistics Iceland began compiling data on the country distribution of Iceland’s services trade; therefore, the selection of currencies is now based on the three-year average of trade in goods and services. The main changes from the previous baskets are as follows:

Narrow merchandise (A), narrow services (C), and narrow trade basket (E):
- No change.

Broad merchandise (B), broad services (D), and broad trade basket (F):
- The Venezuelan bolivar is excluded from the baskets.
- The Indian rupee is excluded from the baskets.
- The Singapore dollar is added to the baskets.

Among other changes, Lithuania is now part of the euro area because of its accession to the European Monetary Union as of 1 January 2015. In the merchandise trade baskets, the weight of the Danish krone, the Brazil real, the Chinese yuan, and the euro has increased, while the weight of the Norwegian krone, the Russian rouble, the British pound, and the US dollar has decreased. The most significant changes in the services basket are as follows: the weight of the Singapore dollar, the Swiss franc, and the US dollar has increased, while the weight of the British pound and the other Nordic currencies has decreased. The trade baskets reflect these changes to a large degree. The weight of the Singapore dollar and the Swiss franc has increased the most, although the weight of the US dollar has increased somewhat. The weight of the British pound and the Norwegian krone has declined somewhat between years.

The tables showing the new baskets and the changes from the previous baskets can be found here:

Tables showing revised currency weights and changes from the previous weights (Excel file)

Baskets 2014 (pdf)

 

Older announcements:

From 2013: 

The weights of currencies in the baskets used to calculate the broad and narrow merchandise- and trade-weighted indices have been updated. The weights are determined based on Iceland’s external trade in 2012. The last review was carried out in January 2012. The tables show the new baskets and the changes resulting from the review. The revised baskets will be used as of 1 January 2014 and will remain in use until the next annual review.

The weights are determined based on the composition of Iceland’s external trade during the previous year. The aim is that the baskets reflect as closely as possible the composition of Iceland’s external trade in both goods and services. In 2011, Statistics Iceland began compiling data on the country distribution of Iceland’s services trade; therefore, it is now possible for the first time to include these data in the three-year average of total external trade. As a result, the selection of currencies for the baskets will be determined henceforth by trade in both goods and services. The main changes from the previous baskets are as follows:

Narrow merchandise (A), narrow services (C), and narrow trade basket (E):
- The Saudi Arabian riyal is added to the baskets.
- The Nigerian naira is excluded from the baskets.
- The Lithuanian litas is excluded from the baskets.

Broad merchandise (B), broad services (D), and broad trade basket (F):
- The Saudi Arabian riyal is added to the baskets.
- The Venezuelan bolivar is added to the baskets.
- The Australian dollar is excluded from the baskets.

The other most significant changes in the merchandise trade baskets are as follows: the weight of the euro, the Japanese yen, the Polish złoty, and the Indian rupee has diminished, while the weight of the Norwegian krone, the Chinese yuan, and the Brazilian real has increased. The most significant changes in the services basket are as follows: the weight of the Saudi Arabian riyal, the US dollar, and the Venezuelan bolivar has increased, while the weight of the euro, the Swedish krona, the Danish krone, and the British pound has diminished. The trade baskets reflect these changes to a large degree, and the most pronounced change from the previous baskets is the reduction in the weight of the euro. The largest increase is in the weight of the Saudi Arabian riyal, although the weight of the US dollar, the Norwegian krone, and the Chinese yuan has increased as well.

The tables showing the new baskets and the changes from the previous baskets can be found here:

Tables showing revised currency weights and changes from the previous weights (Excel file)

Baskets 2013 (pdf)

From 2012:

The weights of currencies in the baskets used to calculate the broad and narrow merchandise- and trade-weighted indices have been updated. The weights are determined based on Iceland’s external trade in 2011. The last review was carried out in January 2012. The revised baskets will be used as of 1 January 2013 and will remain in use until the next annual review.

The weights are determined based on the composition of Iceland’s external trade during the previous year. The aim is that the baskets reflect as closely as possible the composition of Iceland’s external trade in both goods and services. The main changes from the previous baskets are as follows:

Narrow merchandise (A) and narrow trade basket (C):
• The Nigerian Naira is added to the baskets.
• The Australian Dollar is excluded from the baskets.

Broad merchandise (B) and broad trade basket (D):
• The Indian Rupee is added to the baskets.
• The Suriname Dollar is excluded from the baskets.
• Jamaican Dollar is excluded from the baskets.

The most significant other change in the merchandise trade baskets is that the weight of the Euro, the Brazilian Real, the Danish and the Swedish krone and the British Pound diminishes somewhat, especially the weight of the Euro, whereas the weight of the Norwegian krone, Russian Rouble and the US Dollar increases somewhat. In the trade baskets the most significant other change is the same as in the merchandise trade baskets, but in addition the weight of the British Pound diminishes somewhat, as the weight of the British Pound in the service trade baskets decreases significantly.

Tables showing revised currency weights and changes from the previous weights (Excel file)

Baskets 2012 (pdf)

From 2011:

The weights of currencies in the baskets used to calculate the broad and narrow merchandise- and trade-weighted indices have been updated. The weights are determined based on Iceland’s external trade in 2010. The last review was carried out in January 2011. The revised baskets will be used as of 1 January 2012 and will remain in use until the next annual review.

The weights are determined based on the composition of Iceland’s external trade during the previous year. The aim is that the baskets reflect as closely as possible the composition of Iceland’s external trade in both goods and services. The main changes from the previous baskets are as follows:

Narrow merchandise (A) and narrow trade basket (C):
• The Brazilian real is added to the baskets.

Broad merchandise (B) and broad trade basket (D):
• The South Korean won is excluded from the baskets.

The most significant other change in the merchandise trade baskets is that the weight of the British pound and the Swedish krone and Norwegian krone diminishes somewhat, especially the weight of the Norwegian krone, whereas the weight of the euro and the Brazilian real increases somewhat. In the trade baskets the most significant other change is the same as in the merchandise trade baskets, but in addition the weight of the Danish krone increases somewhat, as the weight of the Danish krone in the service trade baskets increases significantly.

Tables showing revised currency weights and changes from the previous weights (Excel file)

Baskets 2011 (pdf file)

From 2010:

The weights of currencies in the baskets used to calculate the broad and narrow merchandise- and trade-weighted indices have been updated. The weights are determined based on Iceland's external trade in 2009. The last review was made in January 2010. The revised baskets will be used as of 1 January 2011 and will remain in use until the next annual review.

The weights are determined based on the composition of Iceland’s external trade during the previous year. The aim is that the baskets reflect as closely as possible the composition of Iceland’s external trade in both goods and services. The main changes from the previous baskets are the following.

Narrow merchandise (A) and narrow trade basket (C):

  • No change.

Broad merchandise (B) and broad trade basket (D):

·         The Surinamese dollar, the Jamaican dollar and the Brazilian real are added to the baskets, while the Czech koruna, Estonian kroon and the Latvian lats are excluded from the baskets.

The most significant other change in the merchandise trade baskets is that the weight of the US dollar, the Japanese yen, and the Australian dollar diminishes, whereas the weight of the Norwegian krone and the euro increases somewhat.

There are some changes in the weight of the currencies in the trade baskets as well, as information on services trade has improved significantly. Previously, the primary services trade information used to measure the trade baskets came from the tourism sector; therefore, services trade made limited impact on the trade basket. However, more extensive information on service trade is now available, and the share of services trade in the trade baskets is higher as a result. The most significant change in the trade baskets is that the weight of the euro diminishes and the weight of the British pound increases.

Tables showing revised currency weights and changes from the previous weights (Excel file)

Baskets 2010 (Pdf file)

From 2009:

 

The weights of currencies in the baskets that are used to calculate the broad and narrow -merchandise and –trade weighted indexes have been updated. The weights are determined on the basis of Iceland’s external trade in 2008. The last review was made in December 2008. The revised baskets will be used as of January 1st 2010, until the next annual review.

 

The weights are determined on the basis of the composition of Iceland’s external trade during the previous year. The aim is for the baskets to reflect as closely as possible the composition of Iceland’s external trade in both goods and services. Main changes from the previous baskets are the following.

 

Narrow merchandise (A) and narrow trade basket (C):

  • The Australian Dollar is added to the baskets.

 

Broad merchandise (B) and broad trade basket (D):

·         The Australian Dollar is added to the baskets and the Turkish Lira is excluded from the baskets.

 

The most significant other changes are that the weight of the Norwegian Krona increases somewhat and the weight of the US dollar diminishes.

 

Tables showing revised currency weights and changes from the previous weights (Excel-file)

Baskets 2009, a PDF-file

From 2008:

The weights of currencies in the baskets that are used to calculate the broad and narrow -merchandise and –trade weighted indexes have been updated. The weights are determined on the basis of Iceland’s external trade in 2007. The last review was made in December 2007. The revised baskets will be used as of December 1st, until the next annual review.

The weights are determined on the basis of the composition of Iceland’s external trade during the previous year. The aim is for the baskets to reflect as closely as possible the composition of Iceland’s external trade in both goods and services. Main changes from the previous baskets are the following.

 

Narrow merchandise (A) and narrow trade basket (C):

  • The Russian ruble is added to the baskets.

 

Broad merchandise (B) and broad trade basket (D):

·         The Taiwanese Dollar and the Suriname Dollar are excluded from the baskets.

 

The most significant other changes are that the weight of the euro increases somewhat and the weight of the US dollar diminishes. Publication of the current official exchange rate index, with a base December 31, 1991 will be discontinued at the end of 2008. The current basket of that indexed has been unchanged since July 2005.

 

Tables showing revised currency weights and changes from the previous weights (Excel-file)

Baskets 2008, a PDF-file

 

Older announcements:

From 2007:

The Central Bank of Iceland has revised the weights of currencies in the baskets that the Bank uses to calculate the broad and narrow merchandise and trade indexes. The weights are determined on the basis of Iceland's external trade in 2006. The last review was made in December 2006. Revised currency weights and the changes from the previous weights are shown in the accompanying tables. The revised baskets will be used to calculate changes in the exchange rate index as of December 3rd, until the next review at a similar time next year.

The weights are determined on the basis of the composition of Iceland's external trade during the previous year. The aim is for the baskets to reflect as closely as possible the composition of Iceland's external trade in both goods and services. Main changes from the previous baskets are the following:

Narrow merchandise (A) and narrow trade basket (C):
• The Russian ruble and the Estonian krona drop out.
• The Lithuanian litas is added to the baskets.

Broad merchandise (B) and broad trade basket (D):
• The Turkish lira and the Czech krona are added to the baskets.

Publication of the current official exchange rate index will be discontinued. However, it will continue to be calculated until the end of 2008 on the basis of the current basket, which took effect in July 2005.

Tables showing revised currency weights and the changes from the previous weights (Excel-file)

Baskets 2007, a PDF-file

 

Older announcements:

From 2006:

As of December 1, 2006, a new method has been introduced for calculating the effective exchange rate indices published by the Central Bank of Iceland. It is planned to cease updating of the currency basket that has hitherto been used to calculate the official exchange rate index and discontinue publication of this index at the end of 2008. A number of new effective exchange rate indices have been calculated. The weights differ considerably from those used for calculation of the official exchange rate index. In particular, the weight of the US dollar has been reduced. The baskets used to calculate the new indices are based on Iceland’s foreign trade over the preceding year and will be updated annually every September. The following tables show the new baskets based on foreign trade in 2005 and changes from previous baskets.

Publication of the current official exchange rate index will be discontinued. However, it will continue to be calculated until the end of 2008 on the basis of the current basket, which took effect in July 2005.

The main purpose of the change is to allow the baskets to reflect as closely as possible the composition of Iceland’s foreign trade in both goods and services, by increasing the number of component currencies. Calculation of the baskets has been simplified and made more systematic, and also brought more closely into line with established international practice. The reasons behind the changed methodology for calculating the exchange rate indices are described in Monetary Bulletin 2006/2. Four types of index are now calculated. Two are based on merchandise trade and contain different numbers of currencies, while the other two include the tourism sector. The baskets used for calculating the indices are as follows:

A. Narrow merchandise basket: Calculated from merchandise trade with all countries with a weight of at least 1% in Iceland’s merchandise trade over the past three years.

B. Broad merchandise basket: Calculated from merchandise trade with all countries with a weight of at least 0.5% in Iceland’s merchandise trade over the past three years.

C. Narrow trade basket: The same as A, except that it takes into account the relative share of tourism in services trade. The distribution of tourism revenues is estimated from travellers’ nights of accommodation by country of origin, and expenditures from a geographical breakdown of credit card expenditure by Icelanders abroad.

D. Broad trade basket: The same as B, except that it takes into account the relative share of tourism as in C.

Trade with countries not fulfilling the above conditions for a 0.5% share of total trade in the broader baskets or 1% in the narrow baskets is zero-rated. The criterion for inclusion is three-year average merchandise trade volume. This prevents the need for repeatedly including new currencies in the baskets and removing others due to annual fluctuations in trade. No adjustment is made for third-market effects.

Pdf-file with baskets:

Baskets_06.pdf (15 KB)

The new merchandise trade indices have been calculated retrospectively to 1995 and new services trade indices to 1999 and these time series are accessible on the Central Bank of Iceland website.


For further information, contact the Economics and Monetary Policy, tel. +354 569-9600.