Reverse repo


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Reverse repo

In essence, refers to a repurchase agreement. From the customer's perspective, the customer provides a collateralized loan to the seller.

Reverse Repurchase Agreement

A practice in which a bank or other financial institution buys securities or another asset with the proviso that it will resell these same securities or asset to the same seller for an agreed-upon price on a certain day (often the next day). Investors and financial institutions do this in order to raise short-term capital. Indeed, it is the equivalent of a short-term loan with the securities or asset serving as collateral. A reverse repurchase agreement is the same as a repurchase agreement, but from the perspective of the buyer rather than the seller. It is also called a matched sale transaction or simply a reverse.
References in periodicals archive ?
Mumbai (Maharashtra) [India], Feb 7 ( ANI ): The Reserve Bank of India (RBI) on Wednesday kept the repo rate and reverse repo rate unchanged at 6 percent and 5.
8 lakh crore in excess money flooding the banking system post- demonetisation, the RBI in its monetary policy review announced on Thursday has shifted its focus to soaking up the excess cash by raising the reverse repo rate by 0.
For each collateral class, we observe the gross value of securities the dealer has committed to deliver (the total repo amount) as well as the gross value of securities the dealer will receive (the total reverse repo amount).
The reverse repo rate refers to the rate at which the country's central bank -- in this case, the U.
The changes, involving reverse repos and derivatives, reduce the assets included in the calculation and make it easier for them to meet leverage ratio requirements, depending on the final rules adopted by national regulators.
Conversely, a reverse repo is used to inject cash into the banking system by purchasing repo-eligible securities.
9 billion during its Reverse Repo Open Market Operation (Injection) in the government of Pakistan Market Treasury Bills and Pakistan Investment Bonds.
The bank announced hikes in repo and reverse repo rates by 0.
SAMA has decided to lower its reverse repo rate from 50 basis points to 25 basis points effective immediately," a financial source said.
JEDDAH: The Saudi Arabian Monetary Agency (SAMA) yesterday lowered its reverse repo rate from 50 basis points to 25 basis points to boost credit growth.
Further rate cuts are expected in Saudi Arabia in 2009 as the economy witnesses slower growth, said Standard Chartered Bank as it forecast reverse repo rate to come down to 0.
The private sector lender is the first bank to announce a PLR cut after the RBI cut both its repo and reverse repo rates by one percent each.