The mid-point rate is the average of the mid-market rate and the parallel market rate, or you can say the midpoint between the mid-market and parallel market rate.
For example, the Mid-market Exchange rate for USD to NGN as of the time of this writing is $1 to 439.82NGN, and for the parallel market- it’s 850.12. The Mid-point rate would be (439.82+850.12)/2 which is 644.97NGN, this would mean that $1 is equal to 644.97NGN at this rate. Meanwhile, the mid-market rate is the interjection between the buying and selling price of a currency (similar to bid and ask prices).
Why Did we choose the Mid-Point rate?
The Nigerian Naira system operates a two-tiered FX market which is, the parallel market rate popularly known as the “Black market rate”, and the Mid-market rate/Bank rate.
The parallel market rate (₦850.12 -> $1) stands at almost 2x (exactly 1.93x the amount) the Mid-market rate (₦439.82 -> $1) and has been predicted to reach an all-time high of ₦1000 if not more than
If you follow us on our social media accounts, we clearly stated the purpose of this which are, to minimize the Arbitrage that goes on through the use of P2P mechanisms in trading the Naira, to avoid the loss of value for our Native currency and finally to ensure the safety of our partners.
We hopefully look forward to a more favorable rate in the future, but for us to maintain stability and build a more sustainable Ecosystem, we must take into consideration the economic factors and the players as well in our current Market structure.
