what is repo rate?
Answer Posted / sandip
In finance, "repo" means repurchase agreement, and
the "repo rate" is the current interest rate for secured
overnight or very short term secured financing involving
the sale and repurchase of securities. Its how some
securities positions are financed. "reverse repo" is the
same transaction from the borrowers perspective.
So, those terms make sense to financiers in the securities
industry. I dont know that they make sense in the
automobile industry, other than "repo" which is short
for "repossession". That of course is what happens when a
borrower fails to make a lease or financing payment on her
car. Then the "repo man" comes to take the car back as
permitted for breach of the financing agreement.
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