What is Interbank Rate?
The interbank rate is the wholesale exchange rate at which major banks transact currencies among themselves. It is the foundation for all other rates and typically the tightest pricing available — institutional only.
Definition
The "interbank market" is the wholesale FX market where banks trade currencies with each other in volumes of $1M+ per transaction. Quotes come from electronic platforms (EBS, Reuters Matching, banks' own dark pools) where major banks (JPMorgan, Citi, UBS, Deutsche Bank, Goldman) post bids and asks. Spreads at this level are razor-thin — often less than 0.1 pip on EUR/USD. Retail customers cannot access these rates directly; banks then re-quote with their own margins to corporate clients, retail brokers, and end customers. The mid-market rate displayed in retail tools (Google, Wise, our converter) is essentially the interbank mid — typically within fractions of a pip.
Worked example
JPMorgan quotes EUR/USD interbank: bid 1.08510 / ask 1.08512 (a 0.2-pip spread). Citi takes the offer at 1.08512 for $100 million. The mid-market rate that gets reported globally is 1.08511. Your retail tool shows "EUR/USD: 1.0851." When you convert €1,000 at a bank teller, they might give you a rate of 1.0700 (selling EUR at a much worse rate) — a 150-pip retail markup over interbank.
Why it matters
You almost certainly cannot get the interbank rate, but knowing it exists and tracking it gives you the benchmark to evaluate any retail conversion offer. The closer to interbank the better. Multi-currency cards (Wise, Revolut) operate within 0.3–0.8% of interbank; airport currency exchanges run 8–20% above interbank. Most retail differences are explained by how close to interbank each provider can get and choose to pass on.
Live rates from interbank reference data
See interbank rate in action with live rates.
Frequently asked questions
Can I get the interbank rate as a retail customer?
No — direct interbank access requires institutional credit relationships, minimum transaction sizes typically $1M+, and prime brokerage agreements. Retail customers can get rates within fractions of a percent of interbank via fintech services like Wise, but never the exact interbank rate.
Who sets the interbank rate?
No single entity. The rate emerges from continuous price competition among banks via electronic trading platforms. EBS Market and Reuters Matching are the primary venues for spot FX. The "WM/Reuters benchmark rate" calculated at 16:00 London time daily is the most widely-referenced single interbank snapshot.
Is "mid-market rate" the same as "interbank rate"?
In retail usage they're used interchangeably. Technically the interbank rate is the broader market where banks transact; the mid-market rate is the midpoint of the bid-ask within that market at any moment. For consumer planning purposes they're functionally identical.
Related terms
Mid-Market Rate
The mid-market rate is the midpoint between the buy (bid) and sell (ask) price of a currency in the global interbank market. It is the fairest reference rate available and what Google, Reuters, Bloomberg, and Wise all display as "the exchange rate."
Spread (Forex)
The spread is the difference between the buy (ask) price and the sell (bid) price of a currency. For retail customers, this gap is the primary way exchanges, banks, and brokers earn revenue — often disguised as a "commission-free" service.
Pip (Forex)
A pip ("percentage in point") is the smallest standard price increment for a currency pair, typically the fourth decimal place (0.0001) for most pairs or the second decimal place (0.01) for pairs involving the Japanese Yen.