Repo

RECENT NEWS
The Economic Times  Feb 4  Comment 
Veteran banker Uday Kotak today said he expects the RBI to bring down repo rate to 7-7.25 per cent by December.
The Hindu Business Line  Feb 4  Comment 
That their expectation of a cut in the repo rate at least by 25 bps was not to be, came as a disappointment, but the 50 bps reduction in the Statutory Liquidity Ratio (SLR), the knitwear exporters...
The Hindu Business Line  Feb 3  Comment 
(function() { var lb24 = document.createElement('script'); lb24.type = 'text/javascript'; lb24.id = '24lbScript'; lb24.async = true; lb24.c...
The Hindu Business Line  Feb 3  Comment 
The Confederation of Real Estate Developers’ Association of India (Credai) has expressed its unhappiness over the status quo on repo rate contrary to the general expectation that there would be re...
The Hindu Business Line  Feb 3  Comment 
Indian shares fell for a third consecutive session on Tuesday to mark their lowest close in nearly two weeks, as interest-rate sensitive stocks declined after the central bank held the repo rate s...
The Economic Times  Feb 2  Comment 
According to 80% of poll participants, RBI will not cut rates tomorrow, while 20% bankers are predicting a 25 basis points repo rate cut.
Commodity Online  Jan 28  Comment 
Going ahead, ASSOCHAM expects India's economic growth to accelerate from 5.3-5.5 per cent in 2014-15 to 6-6.5 per cent in 2015-16.
Reuters  Jan 22  Comment 
India faces growing pressure over financial uncertainty at budget carrier SpiceJet after leasing company BOC Aviation demanded the return of three leased aircraft, in what is seen as a test of global rules on aircraft investments.




RELATED WIKI ARTICLES
 
TOP CONTRIBUTORS

Repurchase agreements, or repos, are transactions in which a borrower "sells" securities to a lender and agrees to purchase it back for at a specified price on a later date. Most repos are overnight transactions between financial institutions and are primarily used in money markets.

In effect, a repo is a secured loan since the lender gets a collateral for the cash being lent out -- the only difference is that the ownership of the collateral is transferred in the case of repos, whereas under a loan the borrower retains ownership of the collateral. The difference between the selling price and the repurchase price is the effective interest in these transaction.

Rates on repo are different from LIBOR rates, since repos are considered a secured loan whereas the LIBOR is used for unsecured interbank lending.

The US repo market is estimated to be around $4.5 trillion in 2008.[1]

Uses of Repo

Securities dealers are primary users of overnight repos. In order to meet liquidity requirements, they enter into these agreements with short-term investors such as money market funds or other investors who need certain securities for a short-term. Repos are used to finance long positions, borrow money to fund speculative investments, and cover short positions in securities. The Federal Reserve also uses repos for open-market operations where they add or decrease reserves to the banking system by trading in US Treasury securities.

Although repo transactions are backed by a collateral, i.e. the lender can sell the securities to redeem the cash, counter-party risks exists. Specifically, the other party may go bankrupt and not repurchase the securities.

References

  1. ↑ WSJ Online, retrieved October 31, 2008

http://www.bestcashloans.org.uk/

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki