Interbank Rate
The exchange rate at which banks trade currencies with each other. Essentially the same as the mid-market rate — the fairest rate available.
What is the Interbank Rate?
The interbank rate is the exchange rate at which banks and large financial institutions trade currencies with each other on the global foreign exchange market. It is essentially the same as the mid-market rate — the real, unmarkupped exchange rate.
When you see the USD to INR rate on Google or XE.com, you're seeing the interbank rate.
Interbank Rate vs Retail Rate
| Feature | Interbank Rate | Retail Rate (Bank) |
|---|---|---|
| Who gets it | Banks trading with each other | Individual customers |
| Markup | None | 1.5-3% added |
| Where to find | Google, XE.com, Reuters | Your bank's forex desk |
| Fairness | Most fair | Includes bank's profit |
The difference between the interbank rate and the retail rate your bank offers is the FX markup — a hidden profit margin.
Why It Matters
On a $5,000 invoice, the difference between the interbank rate and a typical bank retail rate (2% markup) is approximately ₹8,350. Over a year with monthly payments, that's over ₹1,00,000 lost to FX markup.
FaiirPe adds zero markup on the exchange rate from our banking partner, ensuring you receive a fair exchange rate.
Related Terms
- Mid-Market Rate — another name for the interbank rate
- FX Markup — the premium banks add over the interbank rate
Tired of losing money on every international payment?
FaiirPe charges a flat $19 per invoice with no FX markup. Get in touch for early access.
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