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In a repo agreement, Bank A, needing cash quickly, collaterally provides its bonds to Bank B, which has excess cash. Bank A, referred to as the dealer, sells the bonds to Bank B with an agreement to repurchase them shortly after, typically the next day. Bank B gives Bank A the cash needed, and when the bond buyback occurs, Bank A pays a higher price. For Bank A, this transaction is a repo, while for Bank B, it's a reverse repo aimed at making a profit. Repo transactions are common across various entities, including banks, mutual funds, hedge funds, and central banks.