What does an Interbank exchange rate mean?

The interbank exchange rate is essentially the rate at which banks exchange currencies with one another. Often times various currency exchange platforms will display the "spot" rate, which in actual fact is the interbank exchange rates on their websites.

Exchange rates quoted on these sites are actually used by banks and other interbank participants to buy and sell currencies in the wholesale market. Forex brokers will add a spread to the interbank rate to make a margin as well as account for market movement of a finalized and completed deal.

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