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ℹ️ About Exchange rates

Understand better how does exchange rates works.


In the world's currency markets, traders define the rates at which they are willing to "buy" or "sell" a specific currency.

The difference between the Buy and Sell rates is called the spread.

The exchange rate we may find on general search engines is the mid-market rate (also called midpoint data).

The mid-market rate is an exchange rate, unlike any other. It's the authentic one because it shows the actual exchange rate between two currencies, without any extra fees or hidden overheads.

The mid-market price is the average between what the buyer is prepared to pay and what the seller is ready to sell. In other terms, the mid-market rate is simply the midpoint between demand and supply for a currency, and because of that, it changes all the time.

Midpoint rates are determined by calculating the average median price of Bid and Ask at a specific time.

Banks and money transfer providers do use this rate, usually when they trade between themselves. Unfortunately, it's not the rate they pass onto you. Most providers take the mid-market rate, and apply a margin on top of, without being transparent. This is the reason why small changes may occur between the converted amount and the amount for the same transaction on your bank statements.

Two kinds of exchange rate are known: → Spot: this is the real-time exchange rate based on the demand and supply for a currency. It may vary every nanosecond. → End-Of-Day (EOD): this is the official historical exchange rate based on the median price of Bid and Ask at a specific time.