MEDIA RELEASE No: 2001-16 Date: 28 September 2001 Embargo: For Immediate Release

TRADE-WEIGHTED INDEX

The Bank has revised the weights used for currencies in the trade-weighted index (TWI) for the Australian dollar, to allow for changes in the composition of Australia's trade during 2000/01. The revisions take effect from 2 October 2001.

The composition of the TWI is determined by Australia's two-way trade with its major trading partners based on 2000/01 trade figures published by the Australian Bureau of Statistics. There are 23 currencies in the new TWI, with the United Arab Emirates dirham being added to the basket and none omitted. These 23 countries account for 92 per cent of Australia's two-way trade. The new and old weights are shown in the attached table.

The new weights reflect the ongoing trend increase in the relative importance of Australia's trade with countries in the Asia-Pacific region. Japan's weight has increased slightly from 17.3 per cent to 17.7 percent, while the total of the weights for Asia-Pacific currencies has risen from 59.7 per cent to 60.8 per cent. The weight of the US dollar has declined from 17.1 per cent to 15.5 per cent, while the combined weight of the European countries has declined from 19.5 per cent to 18.3 per cent despite the inclusion of Greece in the calculation of the weight for the euro.

The method for calculating the trade-weighted index is described in the Reserve Bank Bulletin of October 1988; reprints are available on request.

Enquiries:
Manager, Media Office
Information Department
Reserve Bank of Australia
SYDNEY

Phone: +61 2 9551 9720
Fax:     +61 2 9551 8033
E-mail:  rbainfo@rba.gov.au