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Measuring New Zealand’s effective exchange rate

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Abstract

The Reserve Bank maintains a range of exchange rate indices which summarise developments in the New Zealand dollar, by aggregating various bilateral exchange rates that are relevant to New Zealand’s economy. In this article, we review some of the issues involved in doing this aggregation. From 17 December, the number of currencies in the official Trade-Weighted Index (TWI) basket has been increased to 17, and the weights on the various currencies will be calculated using shares of bilateral trade in goods and services between New Zealand and the country of each currency.

Suggested Citation

  • Daan Steenkamp, 2014. "Measuring New Zealand’s effective exchange rate," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 77, pages 1-15, December.
    • Handle: RePEc:nzb:nzbbul:dec2014:02
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    File URL: http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2014/2014dec77-6.pdf
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    References listed on IDEAS

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    1. Reserve Bank of New Zealand, 2012. "For the record," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 75, pages 67-79, September.
    2. Reserve Bank of New Zealand, 2012. "For the record," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 75, pages 36-46, December.
    3. International Monetary Fund, 2005. "New Rates from New Weights," IMF Working Papers 2005/099, International Monetary Fund.
    4. Reserve Bank of New Zealand, 2012. "For the Record," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 75, pages 31-38, June.
    5. David Hargreaves & Bruce White, 1999. "Measures of New Zealand's effective exchange rate," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 62, September.
    6. Reserve Bank of New Zealand, 2012. "For the record," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 75, pages 46-53, March.
    7. Hannah Kite, 2007. "A review of the trade weighted exchange rate index," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 70, June.
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    Cited by:

    1. Erika Arraño & Faruk Miguel, 2015. "Tipo de Cambio Real: Revisión Internacional," Economic Statistics Series 112, Central Bank of Chile.
    2. Nguyen, Luan, 2016. "Should the Reserve Bank worry about the exchange rate?," MPRA Paper 75519, University Library of Munich, Germany.
    3. Alfred A. Haug & India Power, 2022. "Government Spending Multipliers in Times of Tight and Loose Monetary Policy in New Zealand," The Economic Record, The Economic Society of Australia, vol. 98(322), pages 249-270, September.
    4. Russell Barnett & Karyne B. Charbonneau & Guillaume Poulin-Bellisle, 2016. "A New Measure of the Canadian Effective Exchange Rate," Discussion Papers 16-1, Bank of Canada.

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