Revised currency baskets
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 2021. The last review was carried out at the beginning of 2022. The tables show the new baskets and the changes resulting from the review. The revised baskets will be used as of 1 January 2023 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 Australian dollar is excluded from the baskets.
Broad merchandise (B), broad services (D), and broad trade basket (F):
• The Singapore dollar is excluded from the baskets.
In the trade baskets, the weight of the US dollar rises somewhat between years, whereas the weight of the pound sterling declines. In the services baskets, the weight of the US dollar increases markedly, and the weight of the Swedish krona rises somewhat. The weight of the pound sterling falls the most, and the weight of the Norwegian krona falls slightly. The trade baskets reflect these changes to a large degree, as the weight of the US dollar has increased the most between years, while the weight of the pound sterling has decreased the most.