Overnight Repo

overnight repurchase agreement; an arrangement whereby securities dealers and banks finance their inventories of Treasury bills, notes, and bonds. The dealer or bank sells securities to an investor with a temporary surplus of cash, agreeing to buy them back the next day. Such transactions are settled in immediately available federal funds, usually at a rate below the federal funds rate (the rate charged by banks lending funds to each other).

Previous:	Overnight Position, Overlapping Debt
Next:	Overshoot, Oversold

View more Business & Finance videos