Repurchase Agreement - Repo


DEFINITION of 'Repurchase Agreement - Repo'

A form of short-term borrowing for dealers in government securities. The dealer sells the government securities to investors, usually on an overnight basis, and buys them back the following day.

For the party selling the security (and agreeing to repurchase it in the future) it is a repo; for the party on the other end of the transaction, (buying the security and agreeing to sell in the future) it is a reverse repurchase agreement.


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BREAKING DOWN 'Repurchase Agreement - Repo'

Repos are classified as a money-market instrument. They are usually used to raise short-term capital.

  1. Retail Repurchase Agreement

    An alternative to regular savings deposits. Under a retail repurchase ...
  2. Term Repurchase Agreement

    Under a term repurchase agreement, a bank will agree to buy securities ...
  3. Accelerated Share Repurchase - ...

    A specific method by which corporations can repurchase outstanding ...
  4. Money Market

    A segment of the financial market in which financial instruments ...
  5. Government Security

    A bond (or debt obligation) issued by a government authority, ...
  6. Reverse Repurchase Agreement

    The purchase of securities with the agreement to sell them at ...
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  1. What is the primary use of reverse repurchase agreements?

    The Federal Reserve utilizes a reverse repurchase agreement as one of two instruments used for the primary purpose of offsetting ... Read Full Answer >>
  2. Under what circumstances would someone enter into a repurchase agreement?

    In finance, a repurchase agreement represents a contract between two parties, where one party sells a security to the other ... Read Full Answer >>
  3. In a repurchase agreement (repo) why is a longer tenor more risky?

    A repurchase, or repo, agreement is a financial contract in which one party agrees to sell a security to a second party and ... Read Full Answer >>
  4. What is the difference between a term and open repurchase agreement?

    The major difference between a term and an open repurchase agreement (repo) is in the term or tenor. In a term repo, the ... Read Full Answer >>
  5. Who are the key players in the bond market?

    The bond market can essentially be broken down into three main groups: issuers, underwriters and purchasers. The issuers ... Read Full Answer >>
  6. Where can I buy government bonds?

    The type of bond determines where you can purchase it, so you need to decide which type of bond you would like to purchase ... Read Full Answer >>

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