The real exchange rate is published in accordance with a predetermined schedule and are posted at 09:00 hrs. on the publication date.
The real exchange rate of the Icelandic króna (ISK) is published at the beginning of each month and is available at monthly, quarterly and annual frequencies since 1980 based on relative prices and since 1991 based on relative wage costs.
The latest data is preliminary.
Inquiries can be sent to support@sedlabanki.is
More detailed data for ithe real exchange rate can be found in the Databank
Developments in the real exchange rate
Data on the real exchange rate are collected in order to monitor developments in the real exchange rate of the Icelandic króna. The Central Bank also utilizes the data in its operations.
Foundation in law
The foundation in law for data collection is in Article 32 of the Act of the Central Bank of Iceland, No. 92/2019 (in Icelandic). In accordance with Article 41 of the Act, the Central bank is allowed to exchange information with public entities concerning matters falling under the scope of this Act, if the exchange of information is consistent with the legally mandated role of the Central Bank or the recipient.
Real exchange rate
The real exchange rate is defined as the relative development of the price level or labor costs per unit of production in the home country on the one hand and in the trading partners on the other hand since a given base year and measured in the same currency and published as an index.
Data for the real exchange rate are based on official exchange rates and consumer price indices/indices of labor costs per unit of output for Iceland and Iceland's main trading partners according to their weight in external trade (narrow trade weight). The base year of the real exchange rate index is 2005 (annual average 2005 = 100).
Real exchange rate indices are based on:
- Relative consumer price: The consumer price in Iceland in proportion to the consumer price abroad, calculated in the same currency.
- Relative labor cost: Labor cost per unit of production in Iceland in proportion to labor cost per unit of production abroad, calculated in the same currency.
Revision of data
The latest figures are always preliminary.
The real exchange rate is recalculated when new data on developments in the price level and unit labor costs in Iceland's main trading partners become available. Calculations of the real exchange rate are updated monthly to take into account changes as soon as they are received.
The official publication of the exchange rate and consumer price indices are the final publication, but the indices of labor costs per unit of output usually change historically in accordance with audits of the national accounts of Iceland and its trading partners. Sometimes it is necessary to estimate data from trading countries where they have not been received in time. Once the Central Bank's macroeconomic forecast is available, it is possible to publish a new quarterly value for the real exchange rate based on relative wage costs. This value is then updated in the next publication of the real exchange rate after the national accounts have been published on Statistics Iceland's website.
Real exchange rate
The real exchange rate is defined as the development of consumer prices or unit labour costs (ULC) in one country relative to those in its trading partner countries, measured from a specific base year and in the same currency. Data are based on official exchange rate listings and consumer price indices/unit labour cost indices for Iceland and Iceland's main trading partners according to their weight in foreign trade (narrow trade basket). The base year for the real exchange rate index is 2005 (annual average 2005 = 100).
Relative consumer prices
Relative consumer prices are defined as prices in Iceland compared to consumer prices those in other countries, calculated in the same currency.
Relative unit labour cost
Relative unit labour cost is defined as the labour cost per unit produced in Iceland in proportion to the labour costs per unit produced abroad, calculated in the same currency.
Monthly, quarterly and annual data stretching back to 1980 for real exchange rates in relation to relative price levels are published, while quarterly and annual data stretching back to 1991 are published for real exchange rates in relation to relative unit labour costs.