Weights for the TWI

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 country mix of Australia's trade during 1999/00. The revisions take effect from
3 October 2000.

The composition of the TWI is determined by Australia's two-way trade with its major trading partners. Currencies sufficient to account for at least 90 per cent of aggregate trade are included. Based on 1999/00 trade figures, this requires inclusion of 22 currencies, with the South African rand and the Vietnamese dong being added to the basket. The new and old weights are shown in the attached table.

The new weights reflect an increase in the relative importance of Australia's trade with countries in the Asian region (excluding Japan, their weight has increased from 40.4 per cent to 42.4 per cent). Japan's weight has decreased from 18.1 per cent to 17.3 percent. The combined weight of the European countries has decreased from 21.5 per cent to 19.5 per cent.

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