06 September 2013
Repo is short for repurchase agreement. Those who deal in government securities use repos as a form of overnight borrowing.
A dealer or other holder of government securities (usually T-bills) sells the securities to a lender and agrees to repurchase them at an agreed future date at an agreed price.
They are usually very short-term, from overnight to 30 days or more.
This short-term maturity and government backing means repos provide lenders with extremely low risk..
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