Term Repo

A Term Repo, or term repurchase agreement, is a secured money market transaction where one party sells a security, typically a U.S. Treasury bond, to another party and simultaneously agrees to repurchase it at a specified higher price on a predetermined future date, which can range from a few days to several months. This financial instrument functions as a collateralized short-term loan, providing liquidity to the seller (borrower) while offering a low-risk, fixed-income return to the buyer (lender) over a defined period.