Term repo

(redirected from Term Repos)

Term repo

A repurchase agreement with a term of more than one day.

Term Repo

A practice in which a bank or other financial institution buys securities with the proviso that the seller repurchases the same securities for an agreed-upon price on a certain day more than one day after the establishment of the agreement. Investors and financial institutions do this in order to raise short-term capital. A term repo differs from other types of repo because the term is more than one day.
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RBI said it "stands ready to meet the durable liquidity requirements of the system through various available instruments depending on its dynamic assessment of the evolving liquidity and market conditions." Citing proactive steps taken in the last few days, RBI said it conducted open market operation (OMO) on September 19 and provided a liberal infusion of liquidity through term repos in addition to the usual provision via the liquidity adjustment facility (LAF).
In order to prevent excessively worsening of liquidity conditions, which would have impacted financing conditions, RBI undertook measures to inject liquidity through OMO purchase auctions, overnight repo, MSF and variable rate term repos. ( ANI )
Following an assessment of the evolving macroeconomic situation, the Reserve Bank has decided to: reduce the marginal standing facility (MSF) rate by 25 basis points from 9.0 percent to 8.75 percent with immediate effect; increase the policy repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 7.5 percent to 7.75 percent with immediate effect, keep cash reserve ratio (CRR) unchanged at 4.0 percent of net demand and time liability (NDTL); and increase the liquidity provided through term repos of 7-day and 14-day tenor from 0.25 percent of NDTL of the banking system to 0.5 percent with immediate effect.
It has also determined to offer additional liquidity via term repos of 7-day and 14-day tenor for a notified amount equivalent to 0.25% of net demand and time liabilities (NDTL) of the banking system via variable rate auctions, starting October 11.
Rs 19,001 crore has been borrowed by the banks from the Reserve Bank of India (RBI) in the first 7-day term repo auction held on 12th October,2013.
As of September 26, banks had availed of Rs 1.88 lakh crore through term repos from the Reserve Bank, the apex bank said in a statement.
On November 17, 1995, the initial phase of the repo netting service--involving the netting and settlement of the close leg of overnight and term repos (and the start leg of forward-settling repos)--began, with thirteen participants.
Term repos thus were collateralized by cash between a morning reversal and an afternoon settlement.
"Together with an increase in the liquidity provided through escalation of term repos from 0.25 to 0.50 percent of NDTL, the RBI has continued with the rollback of the unconventional monetary and liquidity tightening measures in July," he said.
The average daily liquidity injection (including variable rate overnight and term repos) increased from [?] 1,345 billion in January to [?] 1,935 billion in March.
The average daily liquidity injection (including variable rate overnight and term repos) increased from 1,345 billion in January to 1,935 billion in March.
The Bank is currently considering how it might be able to assist with this, given that the development of a term repo facility would be consistent with the Bank's aim to support the development of New Zealand capital markets.