Advantages of using the mid-market exchange rate

Tilly Michell5 minutes
Advantages of using the mid-market exchange rate
In this article

Foreign exchange (FX) rates, which determine the price of one currency relative to another, are constantly shifting. At the time of writing this article, 1 US dollar is worth approximately 144 Japanese yen; a month ago, that figure was six yen higher.

Not only are FX rates changing day to day, but they also shift depending on which financial institution you are using for your exchange or international transaction. This has implications for the financial efficiency of any company with international customers or suppliers, or ambitions to grow globally. 

It will pay off over the long term to get clear on the difference between the mid-market exchange rate and the retail rate, and where you can access each one. Airwallex offers access to the mid-market exchange rate and gives you the freedom to convert currencies when rates are favourable, allowing your business to cut currency conversion costs and reduce FX risk, so you can ensure that fluctuating exchange rates are working for you, rather than against you.

In this article, we’ll guide you through the key insights you need to know when it comes to foreign exchange.

What is the mid-market exchange rate?

Also known as the interbank rate, middle or mid rate, the MMER is the midpoint between the buying and selling prices of two currencies in the foreign exchange (forex) market. It can be thought of as the ‘fair value’ at which large financial institutions trade currencies among themselves, and it fluctuates depending on the supply and demand for each currency.

A related concept is the bid-ask spread or the buy-sell spread. In this context, this refers to the difference between what a currency is being bought for (bid price) and what it is being sold for (ask price). For example, an American in London buying GBP might get a rate of £0.70 to the dollar, but when they convert their spare cash at the end of the trip, they may be offered a rate of £0.80 to the dollar.

The value of a currency is determined by supply and demand. This, in turn, is influenced by many other factors, such as political and economic stability, inflation and trade. 

Can you buy and sell at the mid-market exchange rate?

The mid-market exchange rate has not been typically available to individuals or businesses directly, but is generally used as a reference point for currency values in the global market. Instead, banks usually charge a “retail rate” which is less favourable to the consumer and includes a profit for the financial institution involved in the exchange.

More recently, it has become possible for businesses and individuals to access the mid-market rate through modern global financial platforms such as Airwallex. This has many benefits, as we’ll explore in the following section. 

Benefits of the mid-market exchange rate


Because the mid-market exchange rate is free from any markups or margins but instead is the midpoint between a currency’s buying (bid) and selling (ask) prices, it brings transparency to foreign exchange trading. It allows individuals and businesses to shop around for a retail exchange rate that is closer to the interbank rate, rather than unknowingly signing up for a service with an excessively high markup.


It can be tempting to stick with a legacy financial institution for foreign exchange transactions and assume that the markup on FX is simply the price of doing business. However, it is possible to find newer platforms that do allow you to exchange currencies at the mid-market rate. This will put your company in the best possible position for global growth.

Let’s say a bank charges a 4.5% markup on the mid-market rate; it has been reported that this is at the top end of the typical range. That means that a £100,000 payout to suppliers using this bank for foreign exchange will cost £4,500 more than using a platform that offered the interbank rate. As companies grow internationally, these unnecessary costs will stack up and compound over time, eating into the business’s profit margin.


It’s true that the mid-market rate fluctuates, as supply and demand for different currencies shifts. This in turn is influenced by economic and geopolitical conditions in the regions where the currencies are issued.

However, the MMR is relatively stable and consistent over short periods, due to the large volumes traded by financial institutions at this rate. It provides a more predictable reference point for regular transactions, whereas retail rates can be even more variable. This is helpful for accurate financial planning.

When companies trading internationally are aware of mid-market exchange rates in real time, they can use this information to negotiate contracts and pricing in a favourable way. The MMR can be used as a reference point to ensure the company doesn’t unknowingly accept an unreasonable FX rate.

The impact of not using the mid-market rate

If your company uses a traditional bank to receive or pay money in a foreign currency, or simply to convert funds from one currency to another, there are typically additional fees, markups and less favourable exchange rates. These costs can accumulate over time, especially for frequent or large transactions.

For example, a 3% markup on a $10,000 currency exchange adds an extra cost of $300. When international transactions are happening on a daily basis, the cost accumulates quickly, eating into the company’s profits.

How to access the mid-market rate

There are several places that you can go to check the current mid-market rate:

  • Financial news websites, such as Bloomberg and Reuters.

  • Online currency converters often show the mid-market rate as a reference point for users, alongside the rates offered to consumers. Check you are using a reputable site.

  • Forex (foreign exchange) trading platforms often display live market rates, including the mid-market rate.

  • Central bank websites often publish official exchange rates, including the mid-market rate.

Until recently, the mid-market rate was only relevant to consumers as a benchmark to compare retail rates. However the world of international finance is evolving and it’s now possible for consumers, including businesses, to convert currencies at the mid-market rate, using platforms such as Airwallex. This is transformative for companies with overseas customers or suppliers, as it means savings on every single foreign transaction. 

Reduce costs and manage risk with Airwallex

Airwallex’s fast, cost-effective international transfers allow you to access mid-market exchange rates when sending money to suppliers and employees around the world. 

With an Airwallex Global Account, companies can collect, hold and send money in multiple currencies, which allows them to hedge against FX risk and avoid unnecessary conversion costs. Collect payment from your international customers directly into your account and exchange them when the FX rate is most favourable. You can also transfer funds from your account around the world with no transaction fees at our bank-beating FX rates.

To learn more about how Airwallex can help your business, sign up for a free account today.

Back to blog


Tilly Michell
Content Marketing Manager

Tilly manages the content strategy for Airwallex. She specialises in content that supports businesses in their growth trajectory.

Subscribe for our latest news and updates

Related Posts

May release notes: Introducing Airwallex Bank Feeds integration with Quickbooks, multi-currency Global Accounts, and Klarna enhancements

May release notes: Introducing Airwallex Bank Feeds integration w...

5 minutes