Correction 1 June 2012:Because of a malfunction in the Central Bank of Iceland’s market information system, the Bank’s exchange rate was incorrectly listed on 1 June 2012. It proved necessary to post the exchange rate again, and the corrected information appeared on the Bank’s website about 50 minutes after the first listing. The difference was small, or 26 aurar (0.26 krónur) in the exchange rate of the euro, and a similar amount for other currencies. The Central Bank apologises for this error.
Correction 16. February 2011:Due to flaws in software, the central exchange rate of several currencies was incorrectly recorded during the period from 13 January 2011 through 14 February 2011. The currencies affected are the Chinese yuan (CNY), the Taiwan dollar (TWD), the South Korean won (KRW), the Surinamese dollar (SRD), the Indian rupee (INR), the Brazilian real (BRL), and the Jamaican dollar (JMD). The exchange rates of these currencies have been changed in the Central Bank of Iceland’s exchange rate database. The difference was greatest on 2 February 2011, when the difference between the recorded exchange rate and the correct rate measured about 5.8%. As an example of the error on that date, the yuan (CNY) was recorded at ISK 1 higher than it should have been.
It should be noted that the recorded exchange rate of these currencies is not the official reference exchange rate in the sense of Article 19 of the Act on the Central Bank of Iceland, no. 36 of 22 May 2001; cf. the news release dated 1 December 2006: /?PageID=13&NewsID=1367 . The Central Bank records the central exchange rate of the above currencies primarily for information purposes for the website’s users. Nonetheless, the Central Bank strongly emphasises the presentation of correct information on currency exchange rates, and it will make all due effort to enhance the reliability of these data in the future. The Bank has also corrected weighted exchange rates, although the effect of these currencies on weighted indices is very limited. For example, the difference in the narrow trade-weighted index for 2 February 2011 was -0.169%. The changes made reduce the index from 213.986 to 213.624.
New: January 6, 2009: The Central Bank of Iceland discontinued the publication of the Exchange Rate Index (the trade-weighted index, TWI) at year-end 2008, as was announced in the Bank’s news release no. 43/2006, dated November 30, 2006, and its statement on the updating of currency baskets and the introduction of new exchange rate indices (see: Updating of currency baskets and the introduction of new exchange rate indices). See also the Bank’s news release no. 1/2009, dated January 6, 2009.
The Central Bank of Iceland makes every effort to ensure that its published information on the official exchange rate is accurate and up to date, but accepts no responsibility for the reliability of these data nor for any conceivable loss which may arise from its use, cf. Copyright and disclaimer. Nor does the Central Bank of Iceland accept responsibility for any information on the exchange rate of currencies against the króna which are published on external websites, or for the consequences of using it.
The exchange rate of the króna is determined in the interbank market for foreign currency which is open from 9:15 to 16:00 on business days. Once a day the Central Bank of Iceland fixes the official exchange rate of the króna against the above currencies to be used as a standard for official agreements, court cases and other agreements between parties when an alternative standard for a rate of exchange is not specified, cf. Article 19 of the Central Bank Act No. 36/2001, and fixes the official exchange rate index at the same time. This is done between 10:45 and 11:00 each morning that organized foreign exchange markets operate. Under special circumstances, the Central Bank may temporarily suspend its own quotation of the rate of exchange of the króna.
The most recent exchange rate is available in XML format here. A parameter can also be entered to specify the date for the exchange rate in XML format. Example: To retrieve the exchange rate on January 25, 2007, add the parameter: /?PageID=289&dagur=25.01.2007
Revised currency baskets
The weights of currencies in the baskets that are used to calculate the broad and narrow -merchandise and –trade weighted indexes have been updated. The weights are determined on the basis of Iceland’s external trade in 2007. The last review was made in December 2007. The revised baskets will be used as of December 1st, until the next annual review.
The weights are determined on the basis of the composition of Iceland’s external trade during the previous year. The aim is for the baskets to reflect as closely as possible the composition of Iceland’s external trade in both goods and services. Main changes from the previous baskets are the following.
Narrow merchandise (A) and narrow trade basket (C):
Broad merchandise (B) and broad trade basket (D):
· The Taiwanese Dollar and the Suriname Dollar are excluded from the baskets.
The most significant other changes are that the weight of the euro increases somewhat and the weight of the US dollar diminishes. Publication of the current official exchange rate index, with a base December 31, 1991 will be discontinued at the end of 2008. The current basket of that indexed has been unchanged since July 2005.
Tables showing revised currency weights and changes from the previous weights (Excel-file)
Baskets 2008, a PDF-file
The Central Bank of Iceland has revised the weights of currencies in the baskets that the Bank uses to calculate the broad and narrow merchandise and trade indexes. The weights are determined on the basis of Iceland's external trade in 2006. The last review was made in December 2006. Revised currency weights and the changes from the previous weights are shown in the accompanying tables. The revised baskets will be used to calculate changes in the exchange rate index as of December 3rd, until the next review at a similar time next year. The weights are determined on the basis of the composition of Iceland's external trade during the previous year. The aim is for the baskets to reflect as closely as possible the composition of Iceland's external trade in both goods and services. Main changes from the previous baskets are the following:
Narrow merchandise (A) and narrow trade basket (C): • The Russian ruble and the Estonian krona drop out. • The Lithuanian litas is added to the baskets. Broad merchandise (B) and broad trade basket (D): • The Turkish lira and the Czech krona are added to the baskets. Publication of the current official exchange rate index will be discontinued. However, it will continue to be calculated until the end of 2008 on the basis of the current basket, which took effect in July 2005.
Tables showing revised currency weights and the changes from the previous weights (Excel-file)
Baskets 2007, a PDF-file
As of December 1, 2006, a new method has been introduced for calculating the effective exchange rate indices published by the Central Bank of Iceland. It is planned to cease updating of the currency basket that has hitherto been used to calculate the official exchange rate index and discontinue publication of this index at the end of 2008. A number of new effective exchange rate indices have been calculated. The weights differ considerably from those used for calculation of the official exchange rate index. In particular, the weight of the US dollar has been reduced. The baskets used to calculate the new indices are based on Iceland’s foreign trade over the preceding year and will be updated annually every September. The following tables show the new baskets based on foreign trade in 2005 and changes from previous baskets.
Publication of the current official exchange rate index will be discontinued. However, it will continue to be calculated until the end of 2008 on the basis of the current basket, which took effect in July 2005. The main purpose of the change is to allow the baskets to reflect as closely as possible the composition of Iceland’s foreign trade in both goods and services, by increasing the number of component currencies. Calculation of the baskets has been simplified and made more systematic, and also brought more closely into line with established international practice. The reasons behind the changed methodology for calculating the exchange rate indices are described in Monetary Bulletin 2006/2. Four types of index are now calculated. Two are based on merchandise trade and contain different numbers of currencies, while the other two include the tourism sector. The baskets used for calculating the indices are as follows: A. Narrow merchandise basket: Calculated from merchandise trade with all countries with a weight of at least 1% in Iceland’s merchandise trade over the past three years. B. Broad merchandise basket: Calculated from merchandise trade with all countries with a weight of at least 0.5% in Iceland’s merchandise trade over the past three years.C. Narrow trade basket: The same as A, except that it takes into account the relative share of tourism in services trade. The distribution of tourism revenues is estimated from travellers’ nights of accommodation by country of origin, and expenditures from a geographical breakdown of credit card expenditure by Icelanders abroad.D. Broad trade basket: The same as B, except that it takes into account the relative share of tourism as in C.Trade with countries not fulfilling the above conditions for a 0.5% share of total trade in the broader baskets or 1% in the narrow baskets is zero-rated. The criterion for inclusion is three-year average merchandise trade volume. This prevents the need for repeatedly including new currencies in the baskets and removing others due to annual fluctuations in trade. No adjustment is made for third-market effects. Pdf-file with baskets:
Baskets_06.pdf (15 KB)
The new merchandise trade indices have been calculated retrospectively to 1995 and new services trade indices to 1999 and these time series are accessible on the Central Bank of Iceland website.For further information, contact Regína Bjarnadóttir at the Economics Department of the Central Bank of Iceland, (firstname.lastname@example.org), tel. +354 569-9692.