Repo

RECENT NEWS
The Economic Times  7 hrs ago  Comment 
The People's Bank of China set the midpoint rate at 6.1164 per dollar prior to market open, firmer than the previous fix at 6.1176.
The Economic Times  8 hrs ago  Comment 
The move aims to further open up the domestic interbank bond market, the People's Bank of China said on its website.
The Economic Times  Jun 3  Comment 
"When the repo rates were at 7.25 the last time, at that point of time our base rates were 9.7. They are at the same level even today."
The Economic Times  Jun 2  Comment 
Tirupur Exporters Association (TEA) today welcomed the reduction in the Repo Rate by 0.25 per cent, announced by RBI Governor Raghuram Rajan.
The Times of India  Jun 2  Comment 
The Reserve Bank of India has cut its benchmark interest rate by 25 basis points to 7.25 percent.
The Hindu Business Line  Jun 1  Comment 
RBI monetary policy review The RBI will hold its bi-monthly monetary policy review today. It is widely expected that the RBI will cut the repo rate by 25 bps. In the last review on...
The Economic Times  Jun 1  Comment 
Russia's rouble slumped and bonds fell after the central bank suspended its one-year forex repo auctions, another signal that policymakers are concerned that a recent rouble rally has gone too far.
newratings.com  Jun 1  Comment 
NEW DELHI (dpa-AFX) - The Indian rupee erased its early advance against the U.S. dollar in evening deals on Monday. Traders look forward to the Reserve Bank of India's monetary policy review on Tuesday amid growing expectations for a rate cut...
Mondo Visione  Jun 1  Comment 
Effective 1 June 2015, Moscow Exchange has implemented a number of planned upgrades and new product roll-outs to the equity, bond and repo markets, thereby expanding the range of facilities and opportunities available to its clients. T+1...
NPR  May 27  Comment 
The scanners are standard equipment for police, but what's not settled is what happens to all the data collected. That data can link people to certain addresses and flag unusual activity.




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