Middle Rate


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.


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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  1. What is foreign exchange?

    Foreign exchange, or Forex, is the conversion of one country's currency into that of another. In a free economy, a country's ... Read Full Answer >>
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  3. Where did the term 'pip' in currency exchange come from?

    The term pip is an acronym for percentage in point or price interest point. It measures a unit of change within a pair of ... Read Full Answer >>
  4. What is the difference between pips, points, and ticks?

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