DEFINITION of 'Middle Rate'

A term used to describe the average rate agreed upon when conducting foreign exchange. The middle rate is calculated using the median average of the bid and offer rates. The middle rate intuitively is the rate in the middle of the prices offered by the market makers.

BREAKING DOWN 'Middle Rate'

For example: The offer price is 1.5 and the bid price is 1.0. Using the median average, the middle rate would be 1.25. This rate can also be called the mid-rate, mid-price, etc.

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