What Is the Mid-Market Rate?

The mid-market rate (also called the interbank rate) is the midpoint between the buy and sell prices of two currencies on the global market. It's the fairest rate available and the benchmark you should use when comparing exchange providers.

How Is It Calculated?

At any moment, there's a price at which banks are willing to buy a currency (bid) and a price at which they'll sell it (ask). The mid-market rate sits exactly halfway between these two prices. For example, if banks buy EUR/USD at 1.0840 and sell at 1.0844, the mid-market rate is 1.0842.

Why It Matters to You

• It's your reference point — Any rate a provider offers you should be compared against the mid-market rate
• It reveals the markup — The difference between the provider's rate and the mid-market rate is their profit margin
• It exposes hidden fees — Some providers claim "zero commission" but hide their fee in a poor exchange rate
• It changes constantly — The mid-market rate moves with the forex market during trading hours

Who Gets the Mid-Market Rate?

Only large banks and financial institutions trade at or very near the mid-market rate. Retail customers always pay a markup, but the size of that markup varies enormously — from under 1% with online providers like Wise to 5-12% at airport and hotel desks.

How to Calculate the Markup

The formula is straightforward: take the difference between the mid-market rate and the provider's rate, divide by the mid-market rate, and multiply by 100. For example, if the mid-market GBP/EUR rate is 1.17 and a bureau offers you 1.12, the markup is: (1.17 - 1.12) ÷ 1.17 × 100 = 4.3%.

Typical Provider Markups

Watch Out For

• "No commission" claims — Often means the fee is hidden in a wider spread
• Dynamic Currency Conversion (DCC) — When abroad, always pay in local currency, not your home currency
• Weekend rates — Some providers apply wider margins on weekends when forex markets are closed