The Economic Times  Mar 17  Comment 
RBI is expected to stay put on the repo rate in its upcoming monetary policy next month because of rise in inflation -- both wholesale and retail.
The Hindu Business Line  Mar 16  Comment 
The central bank is expected to stay put on the repo rate in its upcoming monetary policy next month
Mondo Visione  Mar 9  Comment 
The U.S. Office of Financial Research today posted a research brief, entitled, “Benefits and Risks of Central Clearing in the Repo Market.” The brief says the repurchase agreement (repo) market is a major source of short-term funding in...
Mondo Visione  Feb 27  Comment 
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced the successful completion of a proof-of-concept to better manage the netting process for...
The Economic Times  Feb 11  Comment 
Earlier this week, RBI retained the repo rate, at which it lends to the system, at 6.25 per cent and the reverse repo rate at 5.75 per cent.
Mondo Visione  Feb 8  Comment 
Ordinary shares of Public Joint Stock Company Detsky mir will begin trading on Moscow Exchange on 10 February 2017. The security has been admitted to the top Level 1 List. Key parameters of the security: Security Ordinary...
The Economic Times  Feb 8  Comment 
RBI today kept the repo rate unchanged though it acknolwedged the subdued global economic scenario
The Hindu Business Line  Feb 8  Comment 
The Hindu Business Line  Feb 8  Comment 
The Sensex and Nifty ended marginally lower as the Reserve Bank of India sprung a surprise and did not deliver the expected 25 basis points cut in repo rate, its key policy rate, at the conclusion of...
The Hindu Business Line  Feb 7  Comment 
Economists think that the RBI will deliver a 25 basis points cut in repo rate, at the conclusion of its sixth bi-monthly meet in this fiscal tomorrow morning. The repo rate is currently at 6.25 per c...
The Economic Times  Feb 7  Comment  Feb 3  Comment 
BEIJING (dpa-AFX) - People's Bank of China unexpectedly lifted its interest rates on open market operations and funds provided through Standing Lending Facility on Friday. The bank raised the 7-day reverse repo rate by 10 basis points to...


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.


  1. WSJ Online, retrieved October 31, 2008

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