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Mid-market rate: a useful reference nobody trades at
It is the midpoint between what is paid and what is charged for a currency. It works for comparing, but it is not a price you can convert money at.
You look up what the euro is worth and a clean number appears. You go to convert money and the number is different, always slightly worse. Nobody is deceiving you: the first is a reference and the second is an offer.
What it actually is
The mid-market rate is the midpoint between the price a currency is bought at and the price it is sold at in the market. It is calculated, not offered.
Reference versus price
| Mid rate | The rate applied to you | |
|---|---|---|
| What it is | A point calculated between two prices | A concrete offer |
| Can be traded | No | Yes |
| What it is for | Comparing and measuring | Converting money |
How to use it well
The distance between the mid rate at the time and the one applied to you is, in practice, what the conversion cost. That is the spread, explained in what the FX spread is.
And a warning about decimals
The mid rate moves continuously, so two sources checked a minute apart will not match. To choose between two services, the number that rules is the final amount you receive for the same operation.
Where you will be asked for it
You are never asked: you are shown. It appears in search engines, rate apps, and the advertising of conversion services, almost always as the big number on the screen.
Related terms
What separates that number from the real price is the spread, and why the euro moves is in why the euro is moving. The rest is in the glossary.
This is not financial, legal, tax, or investment advice.
Questions on this topic
Can I convert at the mid rate?
No, and not because anyone is stopping you: it is a reference point calculated between two real prices, buying and selling. Whoever converts has to operate on one side or the other of that point, and that distance is their margin.
What is it useful for, then?
For measuring. If you know the mid rate at the time and the rate you were given, the gap between the two tells you what the conversion cost, even when no fee was charged.
Why does every site show me a different number?
Because the mid rate moves continuously and each source takes it at a different instant. To compare two services, rather than chasing decimals, look at the final amount each one offers for the same operation.
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