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In a repurchase agreement (repo), Bank A, needing cash quickly, transfers its bonds to Bank B, which has excess cash it wants to invest. Bank A, the dealer, sells the bonds to Bank B with a commitment to buy them back shortly, usually the next day, at a higher price. This provides Bank A with the cash it needs while allowing Bank B to earn a profit. From Bank A's viewpoint, this transaction is a repo, and for Bank B, it's a reverse repo since it involves buying securities from Bank A to later sell them back at a profit. Repo transactions are utilized by various entities, including banks, mutual funds, hedge funds, and even central banks.