CADJPY Recovery of currency exchange after inflation

Banks and financial institutions buy and sell currencies with each other - these large institutions are the 'market' and the rate they trade at is the 'market rate'. The difference between the amount being bought and sold is the spread, which is essentially the difference between the buy and sell price.

However, when currency is sold by banks to retail customers, the spread increases significantly and the profit from the transaction is therefore significantly larger.

Therefore, when we focus on money transfer fees when sending money abroad, we often ignore the biggest cost: exchange rate differences.