Agio

/ˈædʒioʊ/ noun

Definition

The premium or fee charged when exchanging one currency for another, or the profit made from such exchanges.

Etymology

From Italian aggio, possibly from Arabic al-'ayn (the substance/value), reflecting medieval Mediterranean trade. The term entered English during the age of international commerce and banking.

Kelly Says

Agio rates have shaped world history—the difference between exchange rates in Venice and Constantinople could literally fund wars, making currency traders some of the most powerful figures in Renaissance Europe.

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