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‡ A repo or Repurchase Agreement is an instrument of money
market.
‡ The party who originally buys the securities effectively acts as
a lender.
‡ The original seller is effectively acting as a borrower, using
their security as collateral for a secured cash loan at a fixed
rate of interest.

What is Repo rate?


‡ The rate at which the RBI lends money to commercial banks is
called repo rate.
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‡ Overnight: One-day maturity transaction

‡ Term: Specified end date

‡ Open repo: No end date


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