FX spread, explained

The spread is the gap between the real commercial rate (the one banks trade at) and the rate you are actually given. If the commercial dollar is R$5.10 and your bank sells you dollars at R$5.40, that R$0.30 is the spread, about 6%, and you pay it whether you notice or not.

The rate in the news or on a search result is the commercial (wholesale) rate. The rate you are offered already has the spread baked in, so the two rarely match. Because the spread is built into the quote rather than shown as a separate fee, most people never see exactly how much they paid.

In Brazil you hear two rates. The dólar comercial is the wholesale rate. The dólar turismo is the retail rate, for travel and cash, and it carries a bigger spread, commonly 3% to 6%. Cards and exchange houses quote close to the tourist rate, which is why a trip or a purchase abroad costs more than the advertised dollar suggests.

The spread rarely travels alone. Add IOF on top, 3.5% on a card or an outbound Wire, and the real cost of a traditional dollar operation is usually 6% to 10%. The rate moving in the headlines matters less than the spread and the tax most people never see.

Here is how a traditional provider and Ruvo compare on the same operation:

To be fair, some spread is normal: moving currency has real costs, and providers take on market risk between the moment you lock a rate and the moment they settle. The problem is not that a spread exists, it is that traditional providers bury it in the quote and make it far wider than those costs justify.

With Ruvo you convert close to the commercial rate, not the tourist rate, and you pay a stated fee instead of a hidden spread: 0.5% to turn reais into digital dollars, with 0% IOF. You see the cost before you confirm. To understand the rate itself, see how the exchange rate works.