Seðlabanki

Revised currency baskets 2019

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 2018. The last review was carried out at the beginning of 2019. The tables show the new baskets and the changes resulting from the review. The revised baskets will be used as of 1 January 2020 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 Brazilian real is excluded from the baskets.

Broad merchandise (B). broad services (D). and broad trade basket (F):
• The Singapore dollar is added to the baskets.

In the goods trade basket, the weight of the Norwegian krone and the Chinese yuan has increased markedly between years, and the weight of the US, Canadian, and Singapore dollars has also increased somewhat. The weight of the euro, Turkish lira, and Saudi Arabian riyal has declined the most. The main changes in the services trade baskets are the increased weight of the US dollar, while the weight of the Danish krone and the Swedish króna has declined the most; furthermore, the weight of the Norwegian krone, Canadian dollar, and Saudi Arabian riyal has declined slightly. The trade baskets reflect these changes to a large degree. The weight of the US dollar has increased them most between years, while the weight of the euro, Turkish lira, Saudi Arabian riyal, and Danish krone has declined.

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

Currency baskets 2019
Currency baskets 2019