Agio

Agio (Ital. aggio, exchange, discount, premium), is a term used in commerce in several slightly different meanings:
 * The variations from fixed pars or rates of exchange in the currencies of different countries.
 * The difference in exchange between two currencies in the same country.
 * If coinage is debased, the real value can be greatly reduced below the nominal value.

Examples

 * When the government of Maria Theresa decided in 1762 to introduce paper money, the "Bankozettel", it was considered so useful, that an agio of 1-2% was paid on these banknotes against coins. However, increasing emissions of the paper money eroded its value and in 1800 their exchange rate rose to 118 3/8 % against 100 in silver. At first, merchants and others would pay 101 to 102 coins to get Bankozettel in a value of 100 coins. When their value fell, it would take 118 3/8 in paper to get 100 in silver.
 * England in times of Napoleonic Wars stopped to redeem its banknotes for hard money in 1797, until the resumption in 1815, but the "disagio" was never more than 31%. In 1814 had the Bank of England less than 1/10 of gold compared to the banknotes in circulation, but their agio to gold was only 9%.