A review of the trade weighted exchange rate index
Over the past year the Bank has completed a review of the official trade weighted index (TWI). This article documents that review, noting issues of importance when considering the most appropriate effective exchange rate for a central bank, and presenting a number of different weighting methodologies. Whilst different effective exchange rate indices are suited to different purposes, at this time we believe the current official five-currency TWI remains a good summary measure for monetary policy purposes. However, the Bank will also begin publishing an extended 14 currency TWI, which includes the currencies of a number of Asian economies with which New Zealand’s bilateral trade has increased markedly in recent years. This ‘extended’ TWI will be published on the Bank’s website as an analytical series and the properties of the series will be further monitored as trade flows develop.
Volume (Year): 70 (2007)
Issue (Month): (June)
|Contact details of provider:|| Postal: |
Phone: 64 4 471-3767
Fax: 64 4 471-2270
Web page: http://www.rbnz.govt.nz
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:nzb:nzbbul:june2007:3. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Reserve Bank of New Zealand Knowledge Centre)
If references are entirely missing, you can add them using this form.