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Finance & Banking vocabulary · Treasury & Markets

Repo

Meaning in finance & banking, with examples

/ˈriːpəʊ/nounAdvanced term

In finance & banking, repo means: Short for repurchase agreement: a deal in which one party sells securities and agrees to buy them back later at a higher price, which works like a short-term secured loan.

In Turkish: repo, geri alım vaadiyle satış

How it is used

Used in treasury and central banking. Banks borrow cash through repo, using government bonds as collateral, and the other side does a reverse repo. Central banks lend to banks through repo auctions, and the repo rate is often the policy rate.

Example sentences

  1. The bank funded its bond position in the overnight repo market.

  2. The central bank provided liquidity through one-week repo auctions.

Common collocations

  • repo rate
  • reverse repo
  • repo market
  • overnight repo
  • repo auction
  • policy rateThe main interest rate set by a central bank to steer the cost of money in the economy and bring inflation towards its target.
  • securitiesFinancial assets that can be bought and sold, such as shares, bonds and bills, which give the owner rights like part ownership or a claim to repayment.
  • liquidityHow easily an asset can be turned into cash without losing value, or how much cash and easily sold assets a bank or company has to meet its payments.
  • central bankA country's or region's main monetary authority, which issues money, sets the policy interest rate and works to keep prices and the financial system stable.
  • collateralAn asset, such as property, cash or securities, that a borrower pledges to a lender and that the lender can sell if the loan is not repaid.

More terms: Treasury & Markets

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This page explains English vocabulary for learners. It is not financial advice.