Data and Statistics
Last Updated: March 2, 2010
International Financial Statistics:
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Exchange Rates in IFS
Exchange rates in IFS are classified into three broad categories, reflecting the role of the authorities in determining the rates and/or the multiplicity of the exchange rates in a country. The three categories are the market rate, describing an exchange rate determined largely by market forces; the official rate, describing an exchange rate determined by the authorities—sometimes in a flexible manner; and the principal, secondary, or tertiary rate, for countries maintaining multiple exchange arrangements.
In IFS, exchange rates are expressed in time series of national currency units per SDR (the unit of account for the Fund) and national currency units per U.S. dollar, or vice versa.
The exchange rates in SDRs are classified and coded as follows:
The exchange rates in U.S. dollars are classified and coded as follows:
Series rf shows period-average national currency units per U.S. dollar, and series rh shows period-average U.S. dollars per unit of national currency. Series rf and rh data are the monthly average of market rates or official rates of the reporting country. If those are not available, they are the monthly average rates in New York. Or if the latter are not available, they are estimates based on simple averages of the end-of-month market rates quoted in the reporting country.
The country tables contain two of the U.S. dollar series—either ae and rf or ag and rh—depending on the form in which the exchange rate is quoted.
Reciprocal relationships are the following:
The relationship between trade figures in IFS and exchange rates is the following:
For members maintaining dual or multiple exchange rate systems, which often reflect wide ranges of exchange rates in effect in a country, lines w, x, and y are presented. Notes on the tables in the monthly issues for these countries describe the current exchange rate systems and identify the exchange rates shown.
European Currency Unit (ECU) and the Euro
For periods before January 1999, the exchange rate sections in tables for members of the European Union (EU)—Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom—Norway and the United States contain a time series on the value of the European currency unit (ECU).
The ECU was issued by the European Monetary Institute (EMI)—successor to the European Monetary Cooperation Fund on January 1, 1994—against gold and foreign exchange deposits by the central banks of the EU member states. The ECU was defined as a basket of currencies of the EU member countries. The share of each currency in the basket was based on the gross national product and foreign trade of the country issuing that currency. The equivalent of the ECU was calculated—first in U.S. dollars and then in the currencies of the member countries—by using representative market exchange rates for the U.S. dollar, as reported by the member countries. In IFS, series ea and ec refer to end-of-period values of national currency units per ECU and ECUs per unit of national currency, respectively; series eb and ed are the arithmetic averages of values within the period.
On January 1, 1999, the euro replaced the ECU, at a rate of one euro per one ECU. Irrevocable conversion factors for the euro, adopted for the eleven countries in the euro area, fixed the central rates between the euro and the currencies participating in the exchange rate mechanism. The irrevocable fixed factors, legally mandated to have six significant digits, are the following: Austria (S 13.7603), Belgium (BF 40.3399), Finland (Fmk 5.94573), France (F 6.55957), Germany (DM 1.95583), Ireland (IR£0.787564), Italy (Lit 1936.27), Luxembourg (Lux F 40.3399), the Netherlands (f. 2.20371), Portugal (Esc 200.482), and Spain (Pta 166.386).
On January 1, 2002, euro banknotes and coins were issued. National currencies continued to be accepted in trade for a short transition period that ended in all member countries by the end of February 2002. The statistical treatment of euro banknotes and coins and outstanding national currencies is described in the section European Economic and Monetary Union under Monetary Statistics.
An accord established compulsory intervention rates for the Danish krone (± 2.25 percent around the euro central rate) and the Greek drachma (± 15 percent around the euro central rate) from January 1, 1999 onwards.
Greece joined the euro area on January 1, 2001, adopting the euro as its currency, with a conversion factor of 340.750 drachmas per euro. Slovenia joined the euro area on January 1, 2007, adopting the euro as its currency, with the conversion factor of 239.640 tolars per euro. The tolar banknotes and coins ceased being a legal tender on January 14, 2007. On January 1, 2008, Cyprus and Malta joined the euro area, adopting the euro as their currency, with the conversion factors of 0.585274 Cyprus pounds per euro and 0.4293 Maltese lira per euro, respectively. The Cyprus pound and the Maltese lira banknotes and coins ceased being legal tender in the respective countries on February 1, 2008. On January 1, 2009, the Slovak Republic joined the euro area, adopting the euro as its currency, with the conversion factor of 30.1260 Slovak koruny per euro; the Slovak koruny banknotes and coins ceased being legal tender on January 17, 2009.
From January 1, 1999 onwards, the member countries of the Bank of Central African States and the Central Bank of West African States changed the peg of their currencies from the French franc to the euro, at a rate of CFAF 655.957 per euro. A few other countries also have pegged their currencies to the euro.
Effective Exchange Rates
The country tables, euro area tables, and world tables provide measures of effective exchange rates, compiled by the IMF’s Research Department, Policy Development and Review Department, Statistics Department, and area departments.
A nominal effective exchange rate index represents the ratio (expressed on the base 2005=100) of an index of a currency’s period- average exchange rate to a weighted geometric average of exchange rates for the currencies of selected countries and the euro area. A real effective exchange rate index represents a nominal effective exchange rate index adjusted for relative movements in national price or cost indicators of the home country, selected countries, and the euro area.
For ease of comparison between the nominal effective exchange rate index and the real effective exchange rate index, the average exchange rate expressed in terms of U.S. dollars per unit of each of the national currencies (line ah) is also given as an index form based on 2005=100 (line ahx). In both cases of the indices, an increase in the index reflects an appreciation. Because of certain data-related limits, particularly where Fund estimates have been used, data users need to exercise considerable caution in interpreting movements in nominal and real effective exchange rates.
The Fund publishes calculated effective exchange rates data only for countries that have given their approval. Please note that similar indices that are calculated by country authorities could cause different results.
These series are published starting with the March 2010 issue of IFS. The nel and rel series are the nominal and real effective exchange rates based on relative unit labor cost for the advanced economies based on a basket of 26 countries and euro area as a group. These 26 advanced economies include Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Australia, Canada, Denmark, Hong Kong SAR, Israel, Japan, Korea, New Zealand, Norway, Singapore, Sweden, Switzerland, United Kingdom, and United States.
The main source for the unit labor cost data is from the OECD Analytical Database (quarterly unit labor cost in manufacturing). However, for Australia, Hong Kong SAR, Singapore, and Israel, the unit labor cost data are provided by IMF staff (annual data interpolated into higher frequencies). The source for the United States' quarterly unit labor cost data is the Bureau of Labor Statistics.
The nec and rec series are the nominal and real effective exchange rates based on relative consumer prices. The weights used in the calculation take account of each country’s trade in both manufactured goods and primary products with its partner, or competitor, countries.
For manufactured goods, trade by type of good and market is distinguished in the database. So it is possible to allow at a disaggregated level for competition among various exporters in a foreign market (i.e., third-market competition) as well as that arising from bilateral trade links.
For primary products, the weights assigned depend principally on a country’s role as a global supplier or buyer of the product. Trade in crude petroleum, petroleum, and other energy products is excluded. For some countries that depend heavily on tourism, bilateral exports of tourism services averaged over 1999–01 are also included in calculating the competitiveness weights.
From January 2006 onwards, the line nec index is weighted based on disaggregate trade data for manufactured goods and primary products covering the three-year period 1999–01. Before that, the weights are for the three-year span 1989–91. The series based on the old weights and the new weights are linked by splicing at December 1995, and the reference base is shifted to 2005=100.
The real effective exchange rate index in line rec is derived from the nominal effective exchange rate index, adjusted for relative changes in consumer prices. Consumer price indices, often available monthly, are used as a measure of domestic costs and prices for these countries. This practice typically reflects the use of consumer prices by the reference and partner, or competitor, countries in compiling these indices.
For countries where multiple exchange rates are in effect, Fund staff estimates of weighted average exchange rates are used in many cases. A weighted average exchange rate is constructed as an average of the various exchange rates, with the weights reflecting the share of trade transacted at each rate. For countries where a weighted average exchange rate cannot be calculated, the principal rate, generally line ahx, is used.
The notes to the country tables in the monthly issues provide information about exceptions in the choice of the consumer price index (generally line 64) and the period average exchange rate index (generally line ahx). For a relatively small number of countries, notes in the country tables in the monthly issues indicate 1) where alternative price indices, such as the wholesale/producer price index or a weighted average of several price indices, are used; 2) where data constraints have made it necessary to use weighting schemes based on aggregate bilateral non-oil trade data; and 3) where trade in services (such as tourism) has been taken into account.
The world table section of this introduction provides a description of the effective exchange rates tables. In addition, a Fund working paper entitled “A Primer on the IMF’s Information Notice System” (WP/97/71), distributed in May 1997, provides background on the concepts and methodology underlying the effective exchange rates. Another Fund working paper “New Rates from New Weights” (WP/05/99), provides background on the methodology underlying the new weights.
SDR Value
Before July 1974, the value of the SDR (unit of account for the Fund) was fixed in terms of U.S. dollars. Over time, the value changed as follows: SDR 1 = U.S. dollar 1 through November 1971; SDR 1 = U.S. dollar 1.08571 from December 1971 through January 1973; and SDR 1 = U.S. dollar 1.20635 from February 1973 through June 1974.
Since July 1974, the Fund has determined the value of the SDR daily on the basis of a basket of currencies, with each currency being assigned a weight in the determination of that value. The currencies in the basket are valued at their market exchange rates for the U.S. dollar. The U.S. dollar equivalents of each currency are summed to yield the rate of the SDR in terms of the U.S. dollar. The rates for the SDR in terms of other currencies are derived from the market exchange rates of these currencies for the U.S. dollar and the U.S. dollar rate for the SDR.
Although the method of calculating the U.S. dollar/SDR exchange rate has remained the same, the currencies’ number and weight have changed over time. Their amount in the SDR basket is reviewed every five years.
From July 1974 through June 1978, the currencies in the basket were of the countries that averaged more than 1 percent share in world exports of goods and services from 1968–72. This established a basket of 16 currencies. Each currency’s relative weight was broadly proportionate to the country’s exports but modified for the U.S. dollar to reflect its real weight in the world economy. To preserve the continuity of valuation, the amount of each of the 16 currencies was such that on June 28, 1974 the value of SDR 1 = U.S. dollar 1.20635.
From July 1978 through December 1980, the composition of the basket was changed on the basis of updated data for 1972–76. The weights of some currencies were also changed. The amount of each of the 16 currencies in the revised basket was such as to ensure that the value of the SDR in terms of any currency on June 30, 1978 was exactly the same in the revised valuation as in the previous valuation.
Since January 1, 1981, the value of the SDR has been determined based on the currencies of the five member countries having the largest exports of goods and services during the five-year period ending one year before the date of the latest revision to the valuation basket. Broadly reflecting the currencies’ relative importance in international trade and finance, the weights are based on the value of the exports of goods and services of the members issuing these currencies and the balances of their currencies officially held by members of the Fund.
From January 1981 through December 1985, the currencies and currency weights of the five members having the largest exports of goods and services during 1975–79 were the U.S. dollar, 42 percent; deutsche mark, 19 percent; French franc, Japanese yen, and pound sterling, 13 percent each.
From January 1986 through December 1990, reflecting the period 1980–84, the weights had changed to U.S. dollar, 42 percent; deutsche mark, 19 percent; Japanese yen, 15 percent; French franc and pound sterling, 12 percent each.
From January 1991 through December 1995, reflecting the period 1985–89, the weights were U.S. dollar, 40 percent; deutsche mark, 21 percent; Japanese yen, 17 percent; French franc and pound sterling, 11 percent each.
On January 1, 1996, the weights were U.S. dollar, 39 percent; deutsche mark, 21 percent; Japanese yen, 18 percent; French franc and pound sterling, 11 percent each.
On January 1, 1999, the currency amount of deutsche mark and French francs were replaced with equivalent amounts of euros, based on the fixed conversion rates between those currencies and the euro, announced on December 31, 1998 by the European Council. The weights in the SDR basket were changed to U.S. dollar, 39 percent; euro, 32 percent (in replacement of the 21 percent for the deutsche mark and 11 percent for the French franc), Japanese yen, 18 percent; and pound sterling, 11 percent.
On January 1, 2001, the weights had changed to U.S. dollar, 45 percent; euro, 29 percent; Japanese yen, 15 percent; and pound sterling, 11 percent.
As of January 1, 2006, the value of the SDR has been determined based on the four currencies included in the valuation basket in the following proportions: U.S. dollar, 44 percent; euro, 34 percent; Japanese yen and pound sterling, 11 percent each.
World Tables on Exchange Rates
Tables A and B on exchange rates, described below, are presented in IFS.
Table A of exchange rates gives the monthly, quarterly, and annual SDR rates in terms of U.S. dollars and reciprocals of these rates.
Table B provides, in terms of national currency units per SDR, end-of-period rates for the currencies of Fund members—including Hong Kong (Special Administrative Region as of 1997)—and the Netherlands Antilles.
Method of Deriving IFS Exchange Rates
For countries that have introduced new currencies, the rates shown in IFS for the period before the introduction of the most recent currency may be used as conversion factors—they may be used to convert national currency data in IFS to U.S. dollar or SDR data. In such cases, the factors are constructed by chain linking the exchange rates of the old and the new currencies. The basis used is the value of the new currency relative to the old currency, as established by the issuing agency at the time the new currency was introduced. Footnotes about the introduction of new currencies are to be found on individual country tables in the monthly issues of IFS.
For countries that are members of the euro area, the exchange rates shown are expressed in national currency units per SDR or per U.S. dollar through 1998, and in euros per SDR or per U.S. dollar thereafter.
A detailed description of the derivation of the exchange rates in IFS, as well as technical issues associated with these rates, is contained in the IFS Supplement on Exchange Rates, No. 9 (1985).