repurchase agreement

An arrangement to sell an asset and to repurchase it at a specified price on a predetermined future date or on demand. Such an agreement is similar to collateralised borrowing, except that in this case ownership of the securities is not retained by the seller. The Eurosystem uses repurchase agreements with a fixed maturity in its reverse transactions.

An agreement between a seller and a buyer whereby the seller agrees to repurchase the securities at an agreed upon price usually at a stated time.