New Rates from New Weights

May 1, 2005

Preview Citation

Format: Chicago

New Rates from New Weights, (USA: International Monetary Fund, 2005) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper describes the result and the methodology of updating nominal and real effective exchange rate weights on the basis of trade data over 1999-2001. The underlying framework is an updated version of the IMF's current effective exchange rate calculation, which uses weights largely based on 1989-91 data. Since then, substantial changes have occurred in international trade relations, warranting a recalculation of effective exchange rate indices on the basis of new trade patterns. Updated weights show that the United States and developing countries (most notably China) have grown in their importance in global trade, while Japan and the European Union have declined, with substantial implications for the path of the dollar and exchange rate effects of emerging market crises since 1995.

Subject: Commodities, Exchange rate indexes, Exchange rates, Real effective exchange rates, Real exchange rates

Keywords: Exchange rate, Exchange rate Index, WP

Publication Details

Pages:

54
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2005/099
Stock No:

WPIEA2005099
ISBN:

9781451861181
ISSN:

1018-5941

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