Purchase and Resale Agreements - PRAs

Definition of 'Purchase and Resale Agreements - PRAs'


An arrangement between the Bank of Canada and dealers whereby the Bank buys treasuries from a dealer, and the dealer agrees to repurchase the treasuries the next day.

Investopedia explains 'Purchase and Resale Agreements - PRAs'


In a PRA, the Bank of Canada is essentially lending money to the dealer at the midpoint of the overnight operating band rate in order to increase the dealer's liquidity.



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