The mid-market exchange rate is the “real” exchange rate that you see on Google and other trusted sources.
The currency exchange mid-market rate is the mid-point of the “buy” and “sell” price of a currency – which is one of the “fair-exchange” prices that you can get on currency conversion.
In simple words, whenever you talk about “today’s exchange rate”, you are basically referring to the mid-market exchange rate (which you also see on Google and XE)
The mid-market exchange rate is also the rate at which banks exchange currencies with one another, and also call it the “interbank rate”.
And banks make money by adding “hidden markups” to the mid-market exchange rate and make extra profits on international transfers.
In this guide, we are going to talk about what Is a mid-market exchange rate? And how to get a mid-market exchange rate when sending money overseas.
And how can you send money abroad using a mid-market rate using a specialist money transfer provider like Wise (ex TransferWise)?
Send money abroad with mid-market exchange rate
TransferWise exchange rate works on the mid-market exchange rate with no conversion fees and hidden markups.
Every currency pair exchange rate (for example, GBP to EUR) are influenced by local and international macroeconomic factors (aggregate demand and supply of the currency).
The aggregate demand and supply of currencies are influenced by imports, exports, interest rates, capital flow, money supply market conditions, interest rate and much more.
How to Calculate the Currency Exchange Mid-Market Rate?
The mid-market exchange rate is determined by identifying the middle rate at which a currency is bought and sold (against other currencies). This is the “real” exchange rate that you see on Google and other trusted sources.
The mid-market exchange rate is calculated by using the median (mid-point) of the “buy” price (a.k.a. bid rates) and “sell” price (a.k.a. ask rates).
Middle rate = (bid rate + ask rate) ÷ 2
The “buy” price and “sell” price are determined by the contact fluctuations of demand and supply of the currency in the global market. And the price difference between them is called the “Spreads”
Is the Mid-Market Rate the Same as the Interbank Rate?
Since bank deals with most of the currency exchange happening in a country, the mid-market currency exchange rate is major used between banks to exchange the currencies from each other. This is why the mid-market exchange rate is also known as the interbank rate.
How to Get Mid-Market Exchange Rate
Generally, it’s not possible to secure a mid-market from traditional banks because high street banks make profits by establishing their own rate (also known as markups) on the mid-market rate.
Since traditional banks add some hidden markups (or margins) on the “buy” price and “sell” price of the currency, these “margins” on the mid-market rate are the “profits” that the banks earn from the customers on international money transfers.
What Is an Exchange Rate Margin?
The high-street bank exchange rates are slightly different from the mid-market exchange rate. This means that they set their own rate to convert currencies in order to make profits from the customers.
The margins on the exchange rate is the difference between the mid-market rate (the actual rate” and the rate offered by the bank (the commercial rate).
This profit margin may range anywhere between 0.01% up to 10% of the total amount of money you want to transfer overseas. And the margin my vary from bank to bank.
Since the banks make money, by keeping the profits (from the margins) from currency conversion + high fixed fees to transfer money overseas – the overall cost of the transfer becomes much higher.
Some top high street banks may also attract customers by promoting “free international transfer” with zero fees or commissions. But these banks may be earning by offering poor exchange rates that may go as high as 10% or more – also known as “hidden fees”.
But transparent online money providers like Wise offers currency exchange at a mid-market rate. TransferWise exchange rates have no hidden markups, commissions, or conversion fees.
How Can I Send Money Overseas at Mid-Market Exchange Rate?
Top-rated international money transfer providers like Wise (ex TransferWise) offers mid-market exchange rate. This is why the TransferWise exchange rate is one of the fairest exchange rates in the market, offering the cheapest way to send money abroad.
Send money abroad with the mid-market exchange rate and low transparent fee with Wise.
How to Avoid High FX Rates Using Mid-Market Exchange rate?
Free Transfer DOESN’T EXIST!!
Banks offer poor exchange rate due to the hidden markups on exchange rate (or profit margins) that is not disclosed to the customer – also knows as the “hidden fees”.
On top of that, some banks may also offer high fixed fees for using the international money transfer service.
Some top banks may also attract customers by showing ZERO transfer fee, which is not true because they earn profits from “hidden fees” that increase the overall money transfer cost from 1.5% up to 10%.
The best thing to do is compare the rates online and check which provider offers the best rate and the lowest fees.
There are some dedicated international transfer service like Wise (ex TransferWise) offer mid-market exchange rate, which is the most fair-exchange rate to transfer money overseas.
Moreover, Wise also locks a good rate for 24 hours, and save you from the currency rate fluctuations.
Wise (ex TransferWise) is one of the cheapest money transfer provider that offer mid-market rate with low transparent fees and ZERO hidden fees. Wise exchange rate is one of the best FX rate in the marketer to send money abroad.
Mid-Market Exchange Rate FAQs
What is mid market exchange rate?
The mid-market exchange rate is the mid-point of the “buy” and “sell” price of a currency – which is one of the “fair-exchange” prices that you can get on currency conversion.
The mid-market exchange rate is also the rate at which banks exchange currencies with one another, also known as the “interbank rate”. It is the “real” exchange rate that you see on Google and other trusted sources like XE.
How often do exchange rates change?
The currency exchange rates are real time that are updated every 60 seconds. The FX rates are constantly fluctuating that during trading hours that is influenced by the aggregate demand and supply of the currency.
There are various other macroeconomics factors that impact the exchange rates, such as imports, exports, inflation, interest rates, market conditions and various other dynamic factors.
Why does the mid-market rate matter?
Mid-market rate is one of the “real” or fair-exchange rate to transfer money overseas. Generally, banks set their own price of buying and selling currencies to the customers and add hidden markups on mid-market exchange rate to earn profits.
To avoid the hidden fees, you can choose a range of specialist international money transfer providers that offers mid-market exchange rate and low transfer fees (for example, using Wise rates to make cheap and safe international money transfers).
What is TransferWise exchange rate?
Wise exchange rates are one of the most real and fair exchange rate to send money online. Wise (ex TransferWise) offer mid-market FX rate with a low transparent fee. Wise rates and money transfer service is one of the best way to send money internationally.
How to get mid market exchange rate?
Generally, it’s not possible to get mid-market from traditional banks because high street banks set their own rate or markups on the mid-market rate for customers.
But transparent online money providers like Wise (ex TransferWise) offers mid-market exchange rate. TransferWise exchange rates have no hidden markups, commissions, or conversion fees.
