Know Your Exec Terms: What is an Overnight Repo exactly?

Plot of the US Federal Reserve Open Market Pur...

Plot of the US Federal Reserve Open Market Purchases of Repo Mortgage Backed Securities (MBS), 2000–2007; based on US government data  (Photo credit: Wikipedia)

It is basically an agreement to sell securities and repurchase them the very next day. A “repo” is a sales and purchase agreement.

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