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Sale and Repurchase Agreement - SRA

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Definition of 'Sale and Repurchase Agreement - SRA'

An open market operation, implemented by the central Bank of Canada, that is designed to affect overnight interest rates and modify the supply of money.
Investopedia Says

Investopedia explains 'Sale and Repurchase Agreement - SRA'

An SRA is implemented when the Bank of Canada sells securities to a chartered bank and agrees to repurchase them the following day. 

This is a contradictory move by the Bank of Canada on the monetary system, since selling these securities requires the chartered banks to spend some cash, thereby reducing the money supply and increasing interest rates.

Related Definitions

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    Bank Of Canada - BOC

    The central bank of Canada, that came into existence after the passing of the Bank of Canada Act in 1935, influences the country's economy and money supply.
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    The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual ...
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  • Money Supply

    The entire quantity of bills, coins, loans, credit and other liquid instruments in a country's economy.
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    • Special Purchase and Resale Agreement - SPRA

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