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What is reverse repurchase

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What is reverse repurchase

Reverse repo refers to the transaction that the People's Bank of China purchases securities from the primary dealer and agrees to sell the securities to the primary dealer on a specific date in the future. Reverse repo refers to the operation of the central bank to put liquidity into the market. Reverse repo maturity refers to the operation of the central bank to recover liquidity from the market, which is called positive repo. Simply put, reverse repurchase is to actively lend funds. The transaction of obtaining bond pledge is called reverse repurchase transaction. At this time, the investor is the lender who accepts bond pledge and lends funds. (Shareholders College: http://www.58188.com )

Return formula of reverse repurchase: transaction amount × annual return rate × repurchase days/365 days=revenue

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