Trade-Weighted Index
The trade-weighted index (TWI) is a measure of the value of the New Zealand dollar (NZD) relative to the currencies of New Zealand’s major trading partners. The TWI is the Reserve Bank’s preferred summary measure for capturing the medium-term effect of exchange rate changes on the New Zealand economy and inflation.
From its inception in 1979 until the end of 1998, the Reserve Bank’s TWI was calculated as a weighted-average of trading partners’ bilateral NZD exchange rates relative to their share of New Zealand’s bilateral trade. With the introduction of the Euro in 1999, the Reserve Bank adopted a new weighting method to better reflect the indirect effect of exchange rate changes on the New Zealand price level, through influencing activity in the New Zealand economy. The current TWI weights the currencies partly (50 per cent) on the basis of the size (GDP) of the trading partner’s economy, and partly (50 per cent) on their share of New Zealand’s bilateral trade. Weights are updated annually on a calendar year basis once both trade and GDP data are available.
TWI rates: current and historical TWI rates are available from the B1 Exchange Rates - bilateral rates and TWI statistics table.
Information releases for TWI
Annual TWI re-weighting
19 Dec 2007 - current weighting
18 Dec 2006
19 Dec 2005
20 Dec 2004
22 Dec
2003
19 Dec 2002
18
Dec 2001
20 Dec 2000
21 Dec 1999
21 Dec
1998
Introduction of Euro and changes to TWI methodology
Historical TWI weights
The file below contains the TWI weights used to calculate the Trade-weighted Index, and the dates from which the weights were used. Although we have provided data back to June 1983, note that for a few of the specified dates the documentation is missing or incomplete. Where possible the missing figures have been estimated.
The file also contains weights for analytical TWI-5 and TWI-14. We have provided data back to 1999.
twiweights.xls (65KB)
Analytical TWI series
In the June 2007 RBNZ Bulletin two new TWI series were published for the first time. The TWI 5 and TWI 14 are analytical series and are constructed using the current TWI methodology (50 percent trade weighted and 50 percent GDP weighted). The analytical series are available from the B1 Exchange Rates – bilateral rates and TWI statistics table. The weights used to construct these TWI series are included in the file above.
For more information on the TWI and other measures of effective exchange rates please refer to the following Reserve Bank Bulletin articles:
Bulletin articles
White, B (1997), The trade weighted index (TWI) measure of the effective exchange rate, (PDF 1.6 MB)
(1998) For the record September to December 1998: Revisions to the Reserve Bank of New Zealand Trade Weighted Exchange Rate Index (TWI) (PDF 52KB)
Hargreaves, D & B. White (1999), Measures of New Zealand’s effective exchange rate, (PDF 232 KB)
Kite (2007) A review of the trade weighted exchange rate index (PDF 235KB)
