Intraday Repo Transactions

Definition ∞ Intraday repo transactions are repurchase agreements that are initiated and concluded within the same trading day. These short-term agreements allow financial institutions to borrow or lend cash against securities for very brief periods, often just a few hours. They are primarily used by banks to manage their short-term liquidity needs and optimize their reserve positions with central banks. Such transactions are vital for maintaining smooth functioning in money markets.
Context ∞ The potential for digital assets and distributed ledger technology to modernize traditional financial markets extends to intraday repo transactions. Tokenized securities and central bank digital currencies could enable real-time, atomic settlement of these agreements, reducing operational friction and counterparty risk. News often covers pilot programs and research initiatives exploring how DLT can enhance the efficiency and speed of these critical liquidity management tools.