The Data: Coverage, Periodicity, and Timeliness |
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Coverage characteristics |
The trade-weighted index (TWI) is a weighted average of the New Zealand dollar with the currencies of New Zealand's major trading partners. The Reserve Bank currently publishes two TWIs:
An index that contains 17 currencies and is weighted using bilateral trade in merchandise and services. When the 17 currency TWI was introduced in December 2014 it was backdated to January 1984 using a consistent methodology.
A series of the TWI "as published" on the day. This series links together a number of different methodologies that have been used through the years to construct the official TWI. |
Periodicity |
Annual |
Timeliness |
Weights are calculated annually in mid-December |
Access by the public |
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Statistics release calendar |
The Statistics Release Calendar provides a long-term plan of scheduled releases. It is updated and released on the first working day of the month. |
Integrity |
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Provision of information about revisions and advance notice of major changes in methodology |
Provisional data are italicised. Data are deemed provisional when a series is under review. New data, or revised data, are in bold font. This applies to the summary table only and not excel files. Revisions are generally published when a table is next due to be updated and released. Should revisions need to be made more promptly, a note is posted on the website. Any major changes in methodology are posted on the website as a note. |
Quality |
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Dissemination of documentation on methodology and sources used in preparing statistics |
Information about the TWI and the method used to calculate the weights can be found in the following Reserve Bank Bulletin articles.
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Trade Weighted Index |
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Trade weighted index (TWI) |
The trade-weighted index (TWI) is a weighted average of the New Zealand dollar with 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. The TWI is published daily in B1 Exchange rates. |
TWI weights |
Weights for the TWI are calculated annually and published in tables B10 and B13. The Reserve Bank currently publishes the weights for two TWIs:
An index that contains 17 currencies and is weighted using bilateral trade in merchandise and services. When the 17 currency TWI was introduced in December 2014 it was backdated to January 1984 using a consistent methodology.
A series of the TWI "as published" on the day. This series links together a number of different methodologies that have been used through the years to construct the official TWI. |
Scale factor |
The scale factor is calculated to prevent spurious shifts in the TWI that could otherwise occur as a result of the re-weighting. By convention, the rescaling is done using the exchange rates prevailing at 11:10am on the day before the new weights are released. The new scale factor is set so that the TWI with the old weights is equal to the TWI with the new weights at that point in time. |
Currencies included in the TWI |
There are 17 currencies included in the official TWI:
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Base exchange rates (31 October 2014) |
The base exchange rates are at 31 October 2014:
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TWI weights |
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Official TWI weights |
A new methodology was introduced for the official TWI in December 2014. The weights are backdated to 1984.
Weights for the reference year are calculated using finalised June year trade data from the previous year (e.g. weights for 2015 were calculated from year ended June 2014 trade data. |
Historical TWI weights |
From 1983 to 2014 the historical TWI weights were calculated using five currencies:
From 1979 to 1998 the weights were calculated solely on bilateral trade. Between 1999 and 2014 the weights were calculated using bilateral trade (50 percent) and the relative size (GDP) of the trading partner's economy (50 percent). From 2014 the historical weights are calculated using the 17 currencies included in the official TWI. The weights are based on bilateral trade. |
We have identified a processing error in producing the nominal trade-weighted index (TWI) effective 8 December 2017. Today we have corrected and re-published the nominal TWI, still effective 8 December 2017. We have also corrected the daily TWI from 8 December 2017 to 6 March 2018.
The TWI is a weighted average of the New Zealand dollar with the currencies of New Zealand's major trading partners. The weights for the 17 currencies in the basket are derived from the countries' trade (goods and services) with New Zealand.
On 7 December 2017 we updated the nominal TWI weights for 2018. We have identified a processing error, the weights for the United Kingdom and Euro Area were calculated incorrectly. The service imports data for the United Kingdom and Euro Area was transposed and so the underlying data going into the weights calculation was not attributed correctly to the United Kingdom and Euro Area.
Please see the difference between the incorrect and corrected contribution of the United Kingdom and Euro Area for the 2018 nominal TWI weights:
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Published weight
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Corrected weight
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Difference
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| United Kingdom
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4.8381
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4.3248
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-0.5133
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| Euro Area
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10.2690
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10.7823
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0.5133
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There are no changes to the weights of the other 15 currencies in the basket applied to the TWI on 8 December 2017.
There are no changes to the exchange rates (published in the B1 table) or trade statistics (published in the B10 table).
The impact of the correction on the TWI is minor. The revision to the daily TWI index results in changes to the second decimal place.
In total the nominal TWI for eleven days changed by the magnitude of 0.01. The nominal daily TWI remains unchanged for all other days. Please see an example of the difference between an incorrect and corrected daily TWI:
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Published TWI
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Corrected TWI
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Difference
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| 8 December 2017
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72.53
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72.54
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0.01
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We apologise for any inconvenience.
If you have any questions, please contact us at stats-info@rbnz.govt.nz.
07 March 2018
| 0 | Zero or value rounded to zero |
| - | Not applicable |
| .. | Not available |
| bold | Revised/new |
| italics | Provisional |
| light red background | Historical |