Forex glossary

Reverse Repo (RRP) in Forex

A clear definition of Reverse Repo (RRP), with practical context for reading markets and making better trading decisions.

Level 2 · From Prices to PracticeTrading psychology

Definition

A reverse repurchase agreement (reverse repo or RRP) is a transaction in which one party buys securities and agrees to sell them back later at an agreed price. From the opposite party's perspective, the same transaction is a repo.

How It Works

This term can appear around accounts, brokers, market structure, or financial commentary. Its exact implementation can vary by jurisdiction, venue, or provider, so the label should be read together with the surrounding documentation.

Why It Matters

Level 2 is about becoming market-literate before a first demo trade. Recognizing the term helps you understand what a platform, broker document, or market report is actually describing.

Key Takeaway

A reverse repurchase agreement (reverse repo or RRP) is a transaction in which one party buys securities and agrees to sell them back later at an agreed price.

Practical forex example

A cash investor buys securities overnight for $1,000,000 and agrees to sell them back the next day for a slightly higher amount. From the cash investor's side, that is a reverse repo.

Why Reverse Repo (RRP) matters

Understanding Reverse Repo (RRP) helps traders interpret market information, plan decisions, and manage risk with more context.

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