# WM/Reuters Benchmark Rates: Definition and Use for Portfolios

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> **Definition**
>
> The WM/Reuters benchmark rates are spot and forward exchange rates used as standard rates for portfolio valuation and performance measurement.

## What Are WM/Reuters Benchmark Rates?

WM/Reuters benchmark rates are spot and forward [foreign exchange](https://www.investopedia.com/terms/f/foreign-exchange.asp) rates that are used as standard rates for portfolio [valuation](https://www.investopedia.com/terms/v/valuation.asp) and performance measurement. The WM/Reuters Closing Spot Rate service was introduced in 1994 to provide standard [forex](https://www.investopedia.com/terms/f/forex.asp) rates that would enable portfolio valuations to be compared more accurately against each other and financial benchmarks. It eliminates the need to account for currency [differentials](https://www.investopedia.com/terms/d/differential.asp).

The WM/Reuters benchmark rates are provided by Thomson Reuters which acquired the World Markets Company (WM) rate calculation business from State Street in 2016. 

### Key Takeaways

*   The WM/Reuters benchmark rates are spot and forward exchange rates used as standard rates for portfolio valuation and performance measurement.
*   The WM/Reuters [benchmark](https://www.investopedia.com/terms/b/benchmark.asp) rates are provided by [Thomson Reuters](https://www.investopedia.com/terms/r/reuters.asp) which acquired the World Markets Company (WM) rate calculation business from State Street in 2016.
*   The service has expanded to 155 closing spot currencies that are covered on an hourly basis.
*   Rates are determined over a five-minute fix period from two minutes 30 seconds before to two minutes 30 seconds after the time of the fix.

  

## Basics of WM/Reuters Benchmark Rates

The original WM/Reuters service provided closing spot rates for 40 currencies a day. The service has since expanded to 155 closing spot currencies that are covered on an hourly basis. WM/Reuters also provides historical data and closing rates for [currency forwards](https://www.investopedia.com/terms/c/currencyforward.asp) and [non-deliverable forwards](https://www.investopedia.com/terms/n/ndf.asp) (NDFs). Rates are provided hourly [intraday](https://www.investopedia.com/terms/i/intraday.asp) for spot, forward, and NDF rates.

Most major equity and bond index compilers use the WM/Reuters benchmark rates in their calculations but the rates are also used for other purposes such as calculating benchmark rates for the settlement of financial [derivatives](https://www.investopedia.com/terms/d/derivative.asp).

> **Important**
>
> Some banks also provide a service to their clients by providing a guarantee to trade at the WM/Reuters rates.

## How Rates Are Determined

The WM/Reuters benchmark rates are determined over a five-minute fix period from two minutes 30 seconds before to two minutes 30 seconds after the time of the fix. This is generally 4 p.m. in London. Bid and offer rates from the order matching system and actual [trades](https://www.investopedia.com/terms/t/trade.asp) executed are captured during this five-minute window.

Trades occur in milliseconds so only a sample is captured rather than every trade. The [median](https://www.investopedia.com/terms/m/median.asp) bid and offer are calculated using valid rates over the fix period and the mid-rate is then calculated from them.

## Importance of Rates

These rates are important because they're used to value trillions of dollars in investments held by [money managers](https://www.investopedia.com/terms/m/moneymanager.asp) and [pension funds](https://www.investopedia.com/terms/p/pensionplan.asp). The method used to fix the WM/Benchmark rates came under intense scrutiny in 2013 after widespread allegations of [collusion](https://www.investopedia.com/terms/c/collusion.asp) and rate manipulation by traders surfaced.

## What Is a Non-Deliverable Forward?

The buyer and seller in a non-deliverable forward (NDF) agree on an amount between the contracted non-deliverable forward rate and the leading spot rate. NDFs are usually settled in cash U.S. dollars.

## What's the Difference Between Intraday and Interday Trading?

Intraday trading takes place during normal business hours. The term is effectively interchangeable with day trading. An investor enters and exits a position within trading hours.

Interday trading involves holding on to a position overnight after the markets have closed.

## How Comprehensive Are the WM/Reuters Benchmark Rates?

  

The WM/Reuters benchmark rates covered 40 currencies a day when Thomson Reuters first acquired the business in 2016. The service has expanded to 155 closing spot currencies that are covered on an hourly basis.

## The Bottom Line

WM/Reuters benchmark rates are used as standard rates for performance measurement and portfolio valuation. Thomas Reuters acquired the rate calculation business in 2016 from State Street and has expanded it to 155 closing spot currencies that it covers on an hourly basis.

These rates can provide a helpful and powerful trading tool but they came under fire from traders in 2013 with allegations of rate manipulation and collusion. Consult with an [experienced broker](https://www.investopedia.com/best-brokers-for-forex-trading-4587882) if you’re not sure how to use them to your best advantage.

> **Article Sources**
>
> 1.  Refinitiv. "[WMR Closing and Intraday Spot, Forward and NDF Rates, WMR FX Benchmark Statement](https://www.refinitiv.com/content/dam/marketing/en_us/documents/methodology/rbsl-benchmark-statement-wm-reuters-methodology.pdf)." Pages 2-3.
>     
> 2.  Thomson Reuters. "[Thomson Reuters Acquires WM/Reuters Foreign Exchange Benchmarks From State Street Corporation](https://www.thomsonreuters.com/en/press-releases/2016/april/thomson-reuters-acquires-wmreuters-foreign-exchange-benchmarks-from-state-street-corporation.html)."
>     
> 3.  Financial Stability Board. "[Foreign Exchange Benchmarks: Final Report](https://www.fsb.org/wp-content/uploads/r_140930.pdf?page_moved=1)." Pages 1-2.
>     
> 4.  CFI Education. "[Non-Deliverable Forward (NDF)](https://corporatefinanceinstitute.com/resources/career-map/sell-side/capital-markets/non-deliverable-forward-ndf/)."
>     
> 5.  Robinhood. "[What Is Intraday?](https://learn.robinhood.com/articles/18pJZyN8UHjFiQZCBJjHgx/what-is-intraday/)"