What is the market rate or interbank rate?

Foreign currency values fluctuate not just on a daily basis, but down to the second. When OFX uses the term ‘Market Rate’, we are referring to the Interbank or Mid-Market Rate--the rate that banks and financial institutions use when they trade currencies with each other.

As the Market Rate changes constantly, when a bank publishes their buy/sell rate for a currency pair (usually updated daily), they often add a margin of up to 5% on top of the Market Rate to hedge their risk. At OFX, by not publishing a firm daily rate, we can adapt the rate we are able to offer as changes happen in the market, and that allows us to make your transfer at a substantially lower margin!

If you have any questions that aren't answered in our FAQs, feel free to ask us here.

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