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# Agio of Bank Money

## Definition

The premium or discount at which bank money (representing deposits of precious metal at banks like Amsterdam) trades relative to current currency in circulation. This premium reflects the superior quality and reliability of bank money compared to debased or worn circulating currency.

## Source Chapter

Book IV, Chapter 3

## Context

Smith explains how the agio varies based on the relative quality of bank money versus current currency, and how banks like Amsterdam's manipulate the agio to prevent stock-jobbing while maintaining currency stability.

## Economic Domain

Exchange

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