Revised currency baskets 2018
The weights of currencies in the baskets used to calculate the trade-weighted exchange rate indices have been updated. The weights are determined based on Iceland’s external trade in 2017. The last review was carried out at the beginning of 2018. The tables show the new baskets and the changes resulting from the review. The revised baskets will be used as of 1 January 2019 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. Currency selection is based on the three-year average of a country’s share in Iceland’s goods and services trade. The main changes from the previous baskets are as follows:
Narrow merchandise (A). narrow services (C). and narrow trade basket (E):
• The Australian dollar is added to the baskets.
• The Russian ruble is excluded from the baskets.
Broad merchandise (B). broad services (D). and broad trade basket (F):
• The South Korean won is added to the baskets.
• The Nigerian naira is excluded from the baskets.
In the goods trade basket, the weight of the US dollar decreases markedly between years, with the weight of the pound sterling decreasing as well. On the other hand, the weight of the Brazilian real and the Saudi riyal increased. The most significant changes in the services basket are as follows: the weight of the euro has increased while the weight of the US dollar and the Swiss franc has decreased the most, with the Norwegian krone and the Saudi riyal decreasing as well. The trade baskets reflect these changes to a large degree. The weight of the US dollar has decreased the most between years, with the Swiss franc decreasing as well, whereas the weights of the Brazilian real, the euro, and the Saudi riyal have increased.
The tables showing the new baskets and the changes from the previous baskets can be found here:
Currency baskets 2018 (Excel)
Currency baskets 2018 (PDF)