Bulletin – December 2010 The Repo Market in Australia Abstract
Repurchase agreements (repos) are a financing instrument widely used by holders of debt securities and play an important role in assisting the smooth functioning of debt markets. Although akin to secured financing, repo rates have recently tended to trade above those on unsecured borrowings. This article outlines the structure of the Australian repo market and considers recent trends in the pricing of repos relative to other short-term interest rates.