Repos Production

Repurchase agreements, or repos, are short-term loans used by financial institutions to raise cash quickly. In a repo, the borrower sells securities (like government bonds) to another party with an agreement to buy them back later at a slightly higher price. The difference in price effectively represents interest. Repos help manage liquidity and finance short-term needs, functioning like a collateralized loan where securities serve as the guarantee. This mechanism provides a secure and efficient way for institutions to access short-term funding while maintaining the value of their assets.