The weights of currencies in the baskets used to calculate the broad and narrow merchandise- and trade-weighted exchange rate indices have been updated. The weights are determined based on Iceland’s external trade in 2024. The last review was carried out at the beginning of 2025. The tables show the new baskets and the changes resulting from the review. The revised baskets will be used as of 1 January 2026 and will remain in use until the next annual review.
The currency baskets are reviewed annually based on Iceland’s external trade during the prior 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):
· No change in currencies.
Broad merchandise (B), broad services (D), and broad trade basket (F):
· The South Korean won is excluded from the baskets.
· The Turkish lira is added to the baskets.
· The Israeli shekel is added to the baskets.
In the merchandise trade baskets, the weight of the Chinese yuan and the US dollar increases somewhat between years, whereas the weight of the euro decreases. In the services trade baskets, the weight of the euro increases significantly, while the weight of the Danish krone and pound sterling declines. These changes are reflected in the trade baskets, where the weight of the Chinese yuan and US dollar increases the most while the weight of the Danish krone decreases the most.