What is the full form of repo?

Question

What is the full form of repo?

Answer 1

In the financial world, the term repo is shorthand for [securities] repurchase agreement.

Owners of a security will sell the security to another party with the explicit agreement to repurchase the security at defined point in the future. The original owner receives cash and pays an interest rate to the new, temporary owner. The new, temporary owner takes possession of the security as collateral to the loan. It is important to note that actual ownership is transferred and that repos are a bit more than a collateralized loan.

Reasons vary for the transaction, but most common are someone needs cash and another person has excess cash. Generally, the person with excess cash does not care what type of security is delivered against the cash as long as it is of suitable risks.  

Suitable risk is negotiated up front prior to entering into the repo agreement. For example, a party may ask for government bonds to be delivered, while another party may specify government bonds with a 8-12 year maturity while yet another may ask for AAA corporates. The mechanism for balancing demands of risk profiles is the interest rate of the cash loan to the original owner of the bond.

Less frequently, the new temporary owner wants a specific security. Since an order for a specific security is tougher to fill than an order for securities with a general profile, the cost of the loan to the original owner is lower. Sometimes, the new, temporary owner will pay the original owner for the right to own the security.

Answer 2

repo??may b rapport or reputation..js guesin!

Answer 3

Whenever the banks have any shortage of funds they can borrow it from RBI. Repo rate is the rate at which our banks borrow rupees from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from RBI becomes more expensive.

repo rate

Definition

Discount rate at which a central bank repurchases government securities from the commercial banks, depending on the level of money supply it decides to maintain in the country's monetary system. To temporarily expand the money supply, the central bank decreases repo rates (so that banks can swap their holdings of government securities for cash), to contract the money supply it increases the repo rates. Alternatively, the central bank decides on a desired level of money supply and lets the market determine the appropriate repo rate.

Full form of repo is repo.

Answer 4

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repossession