M and Reverse repurchase agreement: Difference between pages
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(Reverse repo, or RRP). | |||
A form of secured investing/lending, seen from the perspective of the investor/lender, using an agreement to buy securities at the start of the contract, and to sell them back at a pre-agreed price at a fixed future date. | |||
The investor/lender invests cash at the start (in exchange for the transfer of pre-agreed securities). | |||
At maturity the investor/lender receives their cash back with interest and sells the securities back to the borrower. | |||
==See also== | |||
[[ | A reverse repo is exactly the same transaction as a Repurchase agreement (repo) but from the perspective of the lender (rather than the perspective of the borrower). | ||
[[ | |||
[[ | It could logically have been called a “re-sale agreement”. | ||
[[ | |||
[[ | == See also == | ||
* [[Bilateral repurchase agreement]] | |||
* [[Tri-party repurchase agreement]] | |||
* [[Repurchase agreement]] | |||
* [[Cash in the new post-crisis world]] | |||
[[Category:Liquidity_management]] | |||
Latest revision as of 13:30, 31 October 2016
(Reverse repo, or RRP).
A form of secured investing/lending, seen from the perspective of the investor/lender, using an agreement to buy securities at the start of the contract, and to sell them back at a pre-agreed price at a fixed future date.
The investor/lender invests cash at the start (in exchange for the transfer of pre-agreed securities).
At maturity the investor/lender receives their cash back with interest and sells the securities back to the borrower.
A reverse repo is exactly the same transaction as a Repurchase agreement (repo) but from the perspective of the lender (rather than the perspective of the borrower).
It could logically have been called a “re-sale agreement”.
