You check USD–INR, see 88.10, walk into a money changer and get quoted 89.60. Neither number is wrong. They are answers to different questions, and knowing which is which is the difference between judging a quote and guessing at it.
The rate Google shows you
That is the interbank or mid-market rate — the midpoint between what large banks will buy and sell at, trading in millions. Nobody in retail gets it. It is a reference price, in the way that the spot price of crude is a reference price for petrol.
The rate you are offered
That is the interbank rate plus a margin covering the dealer's cost of holding currency, the risk that the rate moves before they replenish, physical handling, and profit. A fair retail margin on a common currency is roughly 0.7 to 1.5%. Above 3% you are paying for someone's location rather than their service.
- Online authorised dealer — around 0.7 to 1.2% over interbank.
- Bank branch — around 1.5 to 2%.
- High-street money changer — around 2 to 3.5%.
- Airport counter — 8% and upwards.
Buy rate and sell rate are not the same
A dealer sells you dollars at one rate and buys them back at a lower one. The gap between the two is the spread. It is why a same-day round trip — buying currency and immediately selling it back — always loses money, and why it is worth thinking about how much you actually need rather than buying comfortably extra.
The rate is only half the price
Two quotes at the same rate can cost different amounts. A service charge, a delivery charge and GST all sit on top, and GST is calculated on a deemed value under Rule 32(2)(b) rather than on your money. A dealer quoting 88.90 with a ₹500 charge may be dearer than one quoting 89.05 with none.
So compare the total. One number, all-in, for the exact amount you want.
How long a quote lasts
- Rates move continuously through the trading day. A quote given at 11am is not binding at 4pm unless someone says it is.
- A rate lock — where a dealer holds a quoted rate for a fixed window — is worth asking for on larger amounts.
- The rate that matters is the one at which your order is confirmed, not the one on the page when you started filling the form.
