I keep hearing about repo rate etc. But this question is not what is the repo rate. It is: What is a definition of 'repo' ?
Repo is the short abbreviation for Repurchase agreement, as per Investopedia (https://www.investopedia.com/terms/r/repurchaseagreement.asp).
Thanks for the link Mike J. My understanding is now that:
A 'repo', short for 'repurchase agreement', is typically: Party 'A' (effectively a borrower - typically a bank) selling an asset (eg. a treasury bond) for cash to Party 'B' (effectively the lender) with the following conditions as part of the deal: Party A agrees to buy the asset back the next day for cash at an agreed slightly higher price and Party B agrees to sell the asset back to Party A the next day for cash at the agreed slightly higher price.
Party A benefits by obtaining cash for a day and Party B benefits by getting a percentage return on the cash provided.
The annualised percentage price increase to the slightly higher price is known as 'The Repo Rate.' Increased repo rates indicates that repo lenders see more risk of default in Repo borrowers.
As repo borrowers are usually banks then a higher repo rate indicates a degree of banking system instability, either systemic or technical.