Overnight repo in economics and finance

Hello everyone! Today, we are going to discuss a crucial aspect of the financial world - overnight repo. Repo, short for repurchase agreement, is a transaction where one party sells a security to another with an agreement to repurchase it at a later date. When this agreement spans a single night, it is referred to as an overnight repo. This mechanism plays a vital role in the functioning of financial markets, facilitating short-term borrowing and lending.