Glossary entry

Interbank rate

The interbank rate is the rate at which banks trade currencies with each other in the wholesale market. People often use the term loosely as a synonym for the mid-market rate, and the two are closely related. Customers at exchange counters, ATMs and card terminals do not usually receive it, because each provider adds costs and profit to the price. It is still useful as a yardstick: the further an offer sits from the interbank level, the more the conversion costs you. See also: mid-market rate, margin, spread, and the guide Mid-Market Rate vs the Rate You Actually Get.