Revised currency baskets 2021
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 2020. The last review was carried out at the beginning of 2021. The tables show the new baskets and the changes resulting from the review. The revised baskets will be used as of 1 January 2022 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):
• The Brazilian real is added to the baskets.
• The Saudi Arabian riyal is excluded from the baskets.
Broad merchandise (B), broad services (D), and broad trade basket (F):
• The Jamaican dollar is added to the baskets.
• The South Korean won is excluded from the baskets.
• The Turkish lira is excluded from the baskets.
In the merchandise trade baskets, the weight of the euro and the Brazilian real increases considerably between years. On the other hand, the weight of the Canadian dollar, the Norwegian krone, the Australian dollar, and the US dollar decreases. The main changes in the services baskets are a significant increase in the weight of the euro and the Danish krone and a modest increase in the weight of the Swiss franc. The weight of the US dollar declines the most in the services baskets, although the weight of the Canadian dollar and the pound sterling declines somewhat as well. The trade baskets reflect these changes to a large degree. The weight of the euro increases the most between years, and the weight of the Danish krone and the Brazilian real has increased somewhat. The weight of the US dollar declines the most, although the weight of the Australian dollar and the Canadian dollar declines somewhat as well.