__The base year for the WCU2005 series is the year in which the benchmark currency basket and the WCU are both equal to US$1. The base year for the WCU2000 series is the year in which the benchmark currency basket and the WCU are both equal to US$100. The WCU2000 series allows GDP weights to change every 5 years.

 

The WCU2005 series and the associated benchmark currency basket are both reweighted every year with GDP data two years ago. This change in the weights of different currencies from year to year does not affect the fact that in 2005 each reweighted currency basket is still equal to US$1. This is because each currency has been standardized so that the standardized currency unit, whether in US$, Euro, Yen, Pound Sterling, C$, or A$, is equal to US$1 in the base year.

The WCU2005 and the benchmark basket in 2005 are both equal to $1 because the price index is equal to 1 in the base year. If there is has been 10% cumulative inflation since 2005 in a country, say the US, the indexed US$ would be equal to $1.1. If there has been inflation in all countries represented in the WCU2005, then the WCU2005 would be worth more US$ simply because of indexing. If there has been appreciation of the other currencies against the US$, the WCU2005 would be worth even more US$ in nominal terms because of the compensation for US$ depreciation.

 
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