Mid-Market Rate
The mid-market rate is the midpoint between the price at which a currency pair is being bought and the price at which it is being sold — the rate with no margin added. It is a reference point for pricing, not a rate a customer transacts at.
Also called: interbank rate · mid rate
At any moment a currency pair carries two prices: a bid, what a buyer will pay, and an ask, what a seller will accept. The mid-market rate is the midpoint between them. Nobody actually deals at it. It exists because one number is easier to reference than a pair, and because it is the cleanest available answer to what a currency is worth right now.
It is often called the interbank rate, which is loose — the interbank market has its own bid and ask, and the mid is still the midpoint between them. Published mids also differ slightly from one another, because rate sources sample different venues at different instants.
Why it matters
The mid-market rate is the reference against which an FX markup is measured, usually in basis points. A provider advertising “the real exchange rate” or “no markup” is claiming to hand over the mid and charge separately for the service. Whether that is true is settled by comparing the quoted rate against a published mid at the same moment, and then adding the fees to reach the all-in cost.
In practice
The mid-market rate is the reference point an FX markup is measured against, not a rate a retail customer can deal at. Any quote claiming to give the customer the mid should be checked against a published mid taken at the same moment, with the fees added on top.
Example
Two providers quote the same corridor. The first charges no fee and offers a rate 1.2% below the mid-market rate at the time of the quote. The second charges a flat fee and offers a rate 0.3% below the mid. On a transfer of any size worth making, the second is cheaper — and it is the only one of the two with a fee.
Commonly confused with
| Term | How it differs |
|---|---|
| FX Spread | The spread is the gap between bid and ask; the mid-market rate is the midpoint of that same gap. |
| FX Markup | The markup is the distance between the mid-market rate and the customer’s rate; the mid itself carries no margin at all. |
See also
- FX SpreadStrictly, the FX spread is the bid/ask spread: the gap between the price at which a currency can be bought and the price at which it can be sold at the same moment. It is a property of the market and of liquidity in that pair.
- FX MarkupAn FX markup is the difference between a reference rate — normally the mid-market rate — and the rate actually offered to the customer. It is the provider’s price for the conversion, and on a cross-border transfer it is usually the largest part of the cost.
- Basis PointA basis point is one hundredth of one percentage point — 0.01%. FX and payments pricing is quoted in basis points because small percentages are easy to misread: 25 basis points is 0.25%, and 100 basis points is 1.00%.
- All-in CostThe all-in cost of a transfer is everything the sender gives up: explicit fees, the FX markup built into the exchange rate, and any deduction taken downstream before the recipient is paid. It is expressed against the amount sent.